The Swiss National Bank (SNB) has been forced to sever the franc’s anchor to the euro because of the latter’s sustained weakness

“The SNB’s ability to use foreign exchange intervention to hold down the franc has been constrained by criticism of the huge expansion of its balance sheet – now 85% of GDP.

“ In December, the SNB cut interest rates to negative and signalled that they could go lower, but this has failed to stem upward pressure on the currency.

“ The timing of today’s decision may be linked to yesterday’s opinion by the European Court of Justice advocate-general on the legality of the OMT programme, which has reinforced the likelihood of ECB QE. The SNB had the option of resetting the euro / franc peg at a lower level but has chosen to make a clean break with previous policy by moving to a free float.