The Swiss franc rose to fresh high levels against the dollar and euro on Thursday, as investors turned to the refuge currency amid the widening debt crisis in Europe and the United States.
The Swiss currency was being traded at 0.8087 franc for a dollar and 1.149 franc for a euro shortly after midnight.
The franc eased somewhat on Thursday, but remained at peak levels of 0.8151 franc for a dollar and 1.1594 franc against the euro in mid morning trading. "The Swiss franc is in demand," noted Zuercher Kantonalbank analysts.
"The USD/CHF parity reached a new stage, with a horrible decline ... following rumours from Moody's that it was planning to downgrade its rating on the United States" said Bank Pictet analysts.
Pictet analysts said they believed that the dollar would remain weak until it fell to below the barrier of 0.80 franc for a dollar. "The financial situation of the United States, if no solution is found, could spark a financial catastrophe in case of a default and the dollar could quickly fall below 0.75 franc," they said.
"Panic appears to have set in on the forex market in particular, and on the general financial market," the analysts said.
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