Euro hits historic low against Swiss franc

ZURICH: The euro reached a new low against the Swiss franc on Monday, slumping below the 1.27 franc barrier for the first time as investors turned to Switzerland's safehaven currency, analysts said.

The European currency was consistently trading below that mark in the afternoon at 1.263 to 1.269 Swiss francs, after breaking the previous historic low of 1.2702 francs earlier in the day.

"The (debt) fears weighing on the EU, doubts about an economic recovery in the United States and Japanese stagnation don't offer investors many alternatives," analysts at Swiss private bank Pictet said.

That contrasted with healthy indicators for the Swiss economy, they added, predicting that the euro would trade between 1.25 and 1.30 francs in the run-up to Christmas.

With interest rates at historic lows, Switzerland's central bank intervened on money markets earlier this year to try to dampen the speed of the franc's appreciation against the euro.

Last Thursday, Swiss central bank chairman Philipp Hildebrand warned that if market tensions over financial stability in the eurozone were "exacerbated," they would put a strain on the Swiss economy.

"If a deflation threat emerges, the SNB would take the measures necessary to ensure price stability," he added.

The eurozone accounts for the bulk of Swiss trade.