The Swiss Franc made gains against the Euro and most other major peers as it followed the other safe haven currencies higher as concerns over the escalating conflict in Iraq increased fears that a new Gulf War could erupt in the Middle East.
Against the Euro the Franc strengthened to its best level in 4-months as investors turned to safer assets such as the Japanese Yen.
The Pound meanwhile surged to its strongest level since 2009 against the US Dollar.
Investor fears were focused primarily on the conflicts potential impact on global oil prices as rising prices are likely to have a negative impact upon economic growth.
The events in the Middle East are also likely to be mentioned in this week’s US Federal Reserve Policy meeting.
The fighting in Iraq and ongoing clashes in Ukraine between government forces and pro-Russian separatists saw a global shift in sentiment towards the safe haven currencies and other safe assets such as precious metals and bonds.
Oil prices are hovering close to a nine-month high on worries over a possible supply disruption.
The situation in Iraq appears to be worsening as the terrorist forces of the Islamic State of Iraq and the Levant (ISIS) captured a town in the northwest of the country.
The Iraqi army regrouped and according to sources has killed more than 279 insurgents in heavy fighting north of Baghdad.
“It looks like the country is headed to civil war, which will mean a higher risk premium built into oil prices,” said an oil risk manager from Mitsubishi Corp.
In Ukraine tensions look set to increase after Russia cut off Ukraine’s gas supplies after it failed to pay off its debt.
The Euro was weakened further earlier in the session after data showed that inflation in the Eurozone fell further in May.
According to Eurostat, prices increased by just 0.5% across the region last month widely matching forecasts.
The data showed raised the likelihood that the ECB could introduce further measures to stave off the threat of deflation.
Current Swiss Franc (CHF) Exchange Rates
[table width=”100%” colwidth=”50|50|50|50|50″ colalign=”left|left|left|left|left”]
Currency, ,Currency,Rate ,
Swiss Franc,
,US Dollar,1.1114 ,
Swiss Franc,, Pound Sterling,0.6549 ,
Swiss Franc,,Euro,0.8214 ,
Pound Sterling,,Swiss Franc,1.5269 ,
Euro,,Swiss Franc,1.2174 ,
[/table]
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