FOREX-Swiss franc gains after lending curbs; euro buoyant

Thu Jan 23, 2014 4:30am EST
 
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* Dollar falls 0.7 pct vs Swiss franc after government move

* Euro helped by short squeeze, German and French surveys

* Canadian dollar falls to new 4-1/2-year low

By Laurence Fletcher

LONDON, Jan 23 (Reuters) - The Swiss franc rose against the U.S. dollar on Thursday after the Swiss government raised the level of capital that banks must hold against their mortgage book, tightening monetary conditions.

The euro also rose against the dollar after surveys of French and German business activity came in above expectations.

Comments from the Bank of Canada, which said currency depreciation should help exports, knocked the Canadian dollar to a 4-1/2-year low, however, while the Australian dollar was hit by a disappointing survey of Chinese manufacturers.

The U.S. dollar was 0.8 percent lower at CHF0.9043 and the euro was 0.2 percent lower at CHF1.2325 after the Swiss government's move, which coincided with this week's World Economic Forum in Davos.

The Swiss government cited "a considerable risk for the stable development of the economy" driven by strong growth in mortgage loans and residential property prices.   Continued...