By Simon Miller
Switzerland has moved to peg its currency as the euro continued to fall against the Swiss franc this morning.
The franc rose to high levels as fears over European sovereign debt continued.
The Swiss government set a minimum exchange rate of CHF1.20 (£0.94) to the euro and warned that it would enforce this mimimum rate with "utmost determination" and was prepared to buy foreign currency in "unlimited quantities".
In a statement, the Swiss National Bank (SNB) said: "The current massive overvaluation of the Swiss franc poses an acute threat to the Swiss economy and carries the risk of a deflationary development,"
It added: "Even at a rate of CHF1.20 per euro, the Swiss franc is still high and should continue to weaken over time. If the economic outlook and deflationary risks so require, the SNB will take further measures."
The peg appears to have had an immeidate affect with the Swiss Franc falling more than 8% and is currentlly trading at around CHF1.11 to the euro.