Will the Swiss Stabilize the Euro?

The euro keeps diving to new lows and currency traders are hoping someone, (perhaps the Swiss) will step in to stop the bleeding.

Rumors that the Swiss will move to stabilize the currency have stemmed the tide for now. The euro dropped to $1.2176 against the dollar yesterday, a new low, but has bounced back to around $1.2342 in today’s trading.

Nicolas Haymoz, a spokesman for the Swiss central bank, declined to comment on currency market developments. The bank has said in the past that it would act to prevent any excessive appreciation of the Swiss franc.

“There is a lot of speculation that there is a concerted effort to put a floor into the value of the euro,” said Tom di Galoma, the United States head of fixed-income rates trading at Guggenheim Partners. But the decline in stocks reflected “a lack of confidence in the overall plan.”

He added, “I think the longer-term view is that the euro goes lower.”

Shares Fall as Germany Moves to Restrict Trades [NYT]