Investing.com - The euro regained ground against the other major currencies on Monday after the Swiss National Bank said it intervened in markets to weaken the franc, following early steep losses driven by fears over the escalating crisis in Greece.
EUR/CHF was last at 1.0389, off 0.4% for the day after falling as low as 1.0314 overnight.
SNB Chairman Thomas Jordan said Monday the bank had intervened "in order to stabilize the markets," which were thrown into turmoil after Greece announced an emergency bank shutdown.
The current market turmoil over Greece's failure to reach a deal with its creditors "justifies such an action," Jordan said.
The comments came during an international finance forum in Bern.
Last week Jordan warned that the franc is “considerably overvalued” and reiterated that the bank would continue to weaken it by intervening in currency markets.
The Swiss franc is seen as a safe haven investment because of Switzerland's current account surplus, which means it’s not reliant on foreign investment to fund its budget.
The Greek government ordered an emergency bank shutdown on Sunday night and the central bank moved to impose capital controls as the banking system neared insolvency after deposit outflows accelerated over the weekend.
Hours earlier the ECB said it would continue providing emergency liquidity assistance to Greece’s banks, but capped emergency funding at current levels.
Greece broke off negotiations with creditors on Saturday and in a surprise move Prime Minister Alexis Tsipras called for a referendum to be held on July 5 on whether to accept the terms proposed by lenders for extending the country’s bailout.
European finance ministers refused a request from the Greek government to extend the bailout program, set to end on Tuesday, until after the referendum.
Athens is due to repay €1.6 billion to the International Monetary Fund on Tuesday but without a rescue package in place will almost certainly default.
European equities sank on Monday and the yields on Italian, Spanish and Portuguese bonds spiked amid mounting fears that Greece would become the first country to exit the euro zone.
The single currency also recovered from lows against the dollar, yen and sterling.
EUR/USD was last at 1.1114, up from earlier lows of 1.0955. EUR/JPY was at 135.56 after hitting lows of 133.78 in the Asian session, while EUR/GBP was at 0.7078 from 0.6968 earlier.