Currency trading platform Forex.com on Thursday suspended trading in Swiss francs due to the surge in franc volatility after the Swiss National Bank unexpectedly abandoned the currency's exchange rate cap against the euro.
"We're just waiting for our liquidity providers to come back and say they will provide liquidity again," said Kathleen Brooks, research director at Forex.com, adding that the suspension was temporary. "It's very difficult to get liquidity in Swiss francs against anything right now. The whole market has dried up," she said.
The euro plunged nearly 30 percent against the euro to 0.86 francs after the SNB scrapped the 1.20 per euro floor it set over three years ago.
The SNB ended the minimum exchange rate of CHF 1.2 per euro, the bank said in a statement on Thursday. The bank introduced the ceiling in September 2011 when the Swiss franc was exceptionally overvalued.
While introducing negative interest rate in December the bank said it will enforce the currency ceiling with 'utmost determination.'
In order to ensure that the discontinuation of the currency ceiling does not lead to an inappropriate tightening of monetary conditions, the bank cut its key rate to -0.75 percent.
The bank also moved the target range for the three-month libor to -1.25 percent to -0.25 percent from the current range of between -0.75 percent and 0.25 percent.
