by Jane Fisher
The pound has exceeded 1.30 versus the euro for the 1st time in almost 7 years today, or since March 7th 2008, to reach a peak of 1.3041.
Sterling has strengthened, because the Swiss National Bank has unexpectedly ended its minimum exchange rate peg to the euro.
Sterling flies, as SNB ends exchange rate peg
The pound to euro exchange rate has climb, because Switzerland's central bank has ended a a minimum exchange rate peg of 1.20 to the euro, that it imposed back in September 2011.
The idea behind the SNB's peg was to prevent the Swiss franc from climbing too high versus the euro during the Eurozone's debt crisis, and so protect Switzerland's export industry.
However, it now appears that the Swiss National Bank has decided it's futile to maintain the peg, after more than 3 years fighting to prevent the franc from rising.
The SNB's decision has come as a complete shock. George Buckley at Deutsch Bank for instance notes that "Market reaction has been seismic."
This lifted sterling versus the euro, because the Swiss National Bank's decisions means there's now less reason to hold euros, devaluing the common currency.
