Swiss Franc Advances Against Euro on Greek Debt Woes, Bailout Opposition

The Swiss franc advanced to the strongest in more than three weeks against the euro on speculation Greece will need to restructure its debt.

Switzerland’s currency strengthened against its shared European counterpart for a sixth day as Greece said it had no plans to restructure debt even as German officials openly discussed the possibility. Finland’s Justice Ministry said support for the True Finns, whose leader Timo Soinisays taxpayers shouldn’t have helped rescue Greece or Ireland, jumped to 19 percent in elections yesterday.

“These unconfirmed rumors that Greece might have to restructure is a major factor for the franc pushing stronger against the euro,” said Gareth Berry, a foreign-exchange strategist at UBS AG in Singapore. “Switzerland’s fiscal situation is immaculate so any sovereign debt issues will cause the franc benefit from fund managers with a European bias who are looking to switch out of the euro.”

The franc appreciated 0.4 percent to 1.2822 per euro as of 1:08 p.m. in London, after touching 1.2815, the strongest since March 24.

“Restructuring is not an option that’s on the table,” Chantal Hughes, a European Union spokeswoman, told reporters in Brussels today. “We don’t think it will be in any way helpful to the euro zone or the European economy at large,” she added.

“There are no discussions at any level” about a restructuring, Hughes said.

‘Not an Issue’

Greek Finance Minister George Papaconstantinou said in an April 16 interview in Washington that “restructuring is not an issue we’re discussing.”

The comments came after Germany’s Finance Minister Wolfgang Schaeuble said last week that “further measures may have to be taken” if Greece fails a June audit while German Deputy Foreign Minister Werner Hoyer told Bloomberg News that restructuring “would not be a disaster.”

Concern that Europe’s debt crisis is worsening comes as results from Finland’s weekend election threatens to disrupt efforts to push through a debt rescue mechanism 11 days after Portugal became the third euro-area nation to seek a bailout. A permanent bailout fund for indebted euro-area nations requires approval from all 17 members of the bloc.

Switzerland’s currency weakened 0.6 percent to 89.78 centimes to the dollar. The dollar gained versus all but two of its major peers.

The possibility that Finland’s election outcome could disrupt the euro-area’s rescue mechanism has caused a “rush to the dollar,” said Peter Rosenstreich, the Geneva-based chief foreign exchange analyst at Swissquote Group Holding SA. “That’s causing a lot of long Swiss franc positions to be unwound.”

Norway’s krone and the Swedish krona also weakened against the dollar, snapping three days of gains. Norway’s currency lost 1.5 percent to 5.4503 per dollar while Sweden’s krona declined 1.2 percent to 6.2595 to the greenback. www.bloomberg.com