Tradervox.com (Dublin) - Last month, the Swiss National Bank was involved in a feud with the Standard and Poor’s rating company, after the rating company claimed that the continued program of buying euros by the SNB has led to the widening yield spread or interest rate differentials in Europe. The report claimed that SNB has bought government bonds from core euro-zone countries such as France and Germany, leading to low yields in those countries while driving yields from debt-hit countries such as Greece and Spain skyrocketing. The report cited figures from the SNB showing that it has made bond purchases amounting to 80 billion euros. In its response, the SNB released a statement stating that the report was unfounded as the figures used includes deposits with other central banks including the European Central Bank. However, the S&P said that it stands by its conclusion.

As the SNB Chairman Thomas Jordan speaks today, the market will be expecting him to touch on the issues raised by the S&P report released last month. In addition, the SNB Chairman will also be expected to touch on its commitment to buying more euros and how he intends to continue with this program without causing further damage to the euro zone economy. The SNB promised to buy unlimited amount of foreign currency to protect its 1.20 cap placed on the euro. In addition to this, Jordan will also be expected to talk about the State Street Corp announcement of introducing a levy on its franc deposit account. The State Street Corp, which is one of the largest currency trading banks, said that it will charge 0.25 percent on Swiss franc starting November 1 2012.

After the announcement made yesterday, the franc depreciated against the euro, touching a low of 1.2143 from its previous trading of 1.2103 during the Asian trading session. However, it regained its strength settling back to just above 1.21. According to market analysts, the effect on the franc will be limited unless other financial institutions introduce the same measure. However, the effect would be profound if the SNB was to introduce such measures. The speech by Thomas Jordan will be closely evaluated for indications of change of strategy.