The Swiss franc weakened against the other major currencies in the early European session on Thursday, as the Swiss National Bank Chairman Thomas Jordan said that the franc remains "significantly overvalued," and the bank is ready to intervene in the FX markets if required.
Speaking at the General Assembly of the Federation of the Swiss Watch Industry in Lausanne, Switzerland, Jordan said the bank can apply negative interest rates to ease the upward pressure on the Swiss franc.
He warned that there is no easy solution that would absorb all external disruptions. "We must accept these challenging economic conditions for the time being," he added.
He also noted that the current strength of the Swiss franc is a reflection of this global crisis and franc's safe haven appeal, which is especially pronounced in times of high global uncertainty.
A failure in Greece's debt deal with its creditors would spur further appreciation of the Swiss currency, he told.
In the Asian session, the Swiss franc held steady against the other major currencies.
In the early European trading now, the Swiss franc fell to a 1-week low of 1.0497 against the euro and a 10-day low of 131.81 against the yen, from early highs of 1.0452 and 132.71, respectively. If the Swiss franc extends its downtrend, it is likely to find support around 1.05 against the euro and 130.00 against the yen.
Pulling away from an early 2-day high of 1.4633 against the pound, the franc edged down to 1.4724. On the downside, 1.48 is seen as the next support level for the franc.
Against the U.S. dollar, the franc dropped to 0.9379 from an early high of 0.9324. The franc may test support near the 0.95 area.
Looking ahead, U.S. weekly jobless claims for the week ended June 20, U.S. personal income and spending data for May and Markit's flash U.S. Services PMI for June are slated for release in the New York session.
At 8:00 am ET, Federal Reserve Board Governor Daniel Tarullo will participate in "Conversation on the Economy and Financial Regulation" before the Council on Foreign Relations, in New York.
Subsequently, Federal Reserve Governor Jerome Powell will deliver a speech titled "Building a Safer Payment System" at the Federal Reserve Bank of Kansas City, in U.S. at 9:45 a ET.
At 12:10 pm ET, Bank of Canada Deputy Governor Lawrence Schembri is expected to speak at the Windsor-Essex Regional Chamber of Commerce, in Windsor, Canada.
Eurogroup finance ministers will continue the discussion on Greece in preparation for the European Council meeting, later in the day.
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