Swiss franc rises to highest level in more than a decade versus the euro

By John Revill

ZURICH, March 2 (Reuters) - The Swiss franc surged early on Monday to its highest against the euro in more than a decade after investors piled into the safe-haven currency due to fears over the conflict in the Middle East.

The euro EURCHF= dropped to 0.9037 francs in early trading, its lowest level since the Franc Shock of January 2015.

The Swiss National Bank declined to comment on the development or whether it would intervene in currency markets to slow the currency's appreciation.

Analysts said they expected the central bank to sell francs to slow the appreciation, but would not cut interest rates from the current 0% level.

"We could expect some interventions by the SNB to slow this movement, but we don't see the SNB defending a certain level and prevent the franc going below that," said UBS economist Alessandro Bee.

"They will want to take some momentum out of the move, but won't defend the 0.90 level for example because these strong inflows into the franc could reverse very quickly."

Bee said it was unclear how long the situation would last, so it did not make sense to take Swiss interest rates negative or other emergency measures.

"That would only be appropriate if there were long-term problems like a slowdown in the global economy or other central banks were cutting rates," Bee said.

"This spike in the franc is not a structural problem in the euro zone like what happened in 2011. It’s down to geopolitics and risk aversion."