The Swiss franc retreated from record highs on Wednesday, after Switzerland's central bank cut interest rates to counter the currency's rise, although concerns about global growth may curb risk appetite and lend the currency further support.
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Seen as a safe haven from an escalating euro zone debt crisis and fears of a U.S. rating downgrade, the franc has surged from one record to another this year against both the euro and the dollar.
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The Swiss franc held hefty gains in Asia on Wednesday, having rocketed to record highs as investors scrambled for a safe haven on renewed tensions in the euro zone debt market and worries about a global slowdown.
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As jittery markets pushed the euro below the 1.10 level against the Swiss franc for the first time ever on Tuesday, the headache for the Swiss National Bank (SNB) over its limited options to fight the strong franc is turning into a chronic migraine.
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The safe-haven Swiss franc counted its gains on Tuesday on worries about the global economy even as the U.S. looked to have averted a debt default after the House of Representatives approved an 11th hour deal to raise the U.S. borrowing limit.*
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The U.S. dollar remained on the defensive in early Asia-Pacific having hit record lows on the safe-haven Swiss franc as the market awaited the latest attempt by President Barack Obama to break the deadlock on debt talks.
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The euro and dollar both struck record lows against the Swiss franc in Asia on Monday while gold reached new highs as investors sought safety from debt problems plaguing the European Union and United States.
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The yen and Swiss franc held most of their recent hefty gains in Asia on Wednesday, having outperformed after Moody's cut Ireland's credit rating to junk status, fuelling jitters about the euro zone sovereign debt crisis.
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Market volatility and uncertainty in the euro zone are limiting the options for the Swiss National Bank (SNB), which held rates at the historic low of 0.25 percent Thursday, Chairman Philipp Hildebrand told CNBC.
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With the Swiss Franc sitting at a record high against the euro one analyst told CNBC.com that it could be time to bet against the safe haven currency.
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The safe-haven Swiss franc held near a record high against the euro in Asia on Tuesday, benefiting from the ongoing European debt crisis, while the greenback stayed under pressure as other currencies like the Australian dollar squeezed higher.
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The euro fell broadly on Monday and slipped to a record low against the Swiss franc, hurt by ongoing worries about the potential for debt restructuring by Greece, with market positioning pointing to chances of a further drop.
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