Swiss franc falls sharply after SNB sets target rate

LONDON, Sept 6 | Tue Sep 6, 2011 4:15am EDT


(Reuters) - The Swiss franc fell sharply and Swiss shares rose on Tuesday after the Swiss National Bank set an exchange rate target at 1.20 francs per euro.

The euro soared 7 percent on the day to 1.220 francs, according to electronic trading platform EBS, from around 1.1270 francs, while the dollar jumped the same amount against the Swiss currency to 0.8579 francs.

The Swiss National Bank said on Tuesday it would set a minimum exchange rate target of 1.20 francs to the euro and would enforce it by buying foreign currency in unlimited quantities.

Switzerland's share benchmark SMI extended gains to trade 3.2 percent higher at 5,306.54 points. It traded at 5,209.77 points before the announcement. (Reporting by London Markets Team)