Swiss franc tumbles on surprise central bank move

The Swiss franc has fallen 9% against the euro after the Swiss National Bank (SNB) said it was setting a minimum exchange rate against the single currency.

The SNB announced this morning it would impose a minimum exchange rate of 1.20 francs to the euro.

The move saw the euro rise over 9% against the currency to settle around the 1.20 target price, and also strengthen against a basket of other major currencies.

The dollar has also risen sharply against the franc, standing up 7% to trade at 84.84 centimes.

The franc's enduring strength against the euro, US dollar and sterling has intensified over the course of the summer as investors sought perceived safe havens while markets tumbled. On 9 August the franc neared parity with the euro at a record low of 1.048 francs.

"With immediate effect, it will no longer tolerate a euro-franc exchange rate below the minimum rate of 1.20 francs", the SNB said in a statement this morning.

The central bank said it was prepared to buy foreign currency in "unlimited quantities" in order to ensure the success of its new policy.