ZURICH. Swiss National Bank (SNB) suffered losses of up to 9.9 billion francs in foreign currency holdings during the first semester of 2011. Losses caused by the performance of the Swiss franc continues to strengthen because many investors chasing low-risk assets.
This loss makes the market expecting the increased potential for criticism of the SNB if the central bank chose to intervene. Safe-haven Switzerland has gained about 14% against the U.S. dollar and 7% against the euro since the beginning of the year. This reduces the value of foreign currency holdings accumulated SNB between March 2009 and June 2010 when it intervened to restrain the strengthening of the franc.
SNB also recorded a loss of about 10.8 billion during the first semester as a consequence of decrease in gold holdings are stated in Swiss francs. Information alone, the Swiss franc continues to print a new record high levels against the dollar and euro both in recent months. This makes analysts wonder whether the SNB was able to intervene in the market.
This week, a number of Swiss economic data will be released. Among these are the retail sales data, PMI and CPI. If these data provide indications of economic improvement, it will reduce investor fears of worsening global economic conditions.
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