Asian markets were lower today (January 16th) after Switzerland's central bank announced it is removing its cap on the Swiss franc's value against the euro.
Yesterday, the Swiss currency rose above parity against the euro, gaining 33 per cent to €1.1170 (£0.86), but later recovered close to €1.05. It also jumped 31 per cent against the dollar.
"Enforcing and maintaining the minimum exchange rate for the Swiss franc against the euro is no longer justified", the Swiss National Bank said in a statement.
"At least for the short term the Swiss bank action has opened up a new front of financial markets risk," Ric Spooner, chief market analyst at CMC Markets, told AP. "The Swiss bank's move last night is a reminder to investors and traders that central bank action is a source of market risk given the scale of their activities in recent years and its impact on economic activity."
Japan's Nikkei 225 tumbled 1.4 per cent to 16,864.16, while South Korea's Kospi lost 1.4 per cent to 1,888.13. Australia's S&P/ASX 200 edged down 0.6 per cent to 5,299.20, and Hong Kong's Hang Seng index lost one per cent at 24,103.52.
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