The Swiss franc rose almost 30% against the euro on Thursday after the Swiss National Bank dropped its three-year-old cap of 1.20 francs per euro.
The announcement ended SNB’s policy of maintaining the cap, in place since September 2011, and caused a hectic few minutes on the currency markets after the announcement. The franc traded for as much 0.8052 francs per euro before settling at 1.035.
Pressure on SNB to drop the cap came from a weakening outlook for the euro given economic and political troubles in the euro zone. Rumors that the European Central Bank could begin printing money as early as next week as well as elections in Greece that could end the nation’s involvement with the euro have caused investors to seek alternatives to the at-risk euro.
The franc made gains against all 174 currencies tracked by Bloomberg magazine, including a 12% gain against the U.S. dollar.