Tiny Switzerland has thrown a big wrench into global financial markets

Currencies aren’t supposed to move like this. Certainly not currencies like the Swiss franc, long considered a safe, stable store of value.
But a shock move from the Swiss National Bank today—we’ll explain in a minute—pushed the franc up, way up, in early trading today. The knock-on effect is roiling a wide range of markets.
The value of developed-world currencies rarely moves more than 30% in a year, much less in a matter of minutes.
So what happened? Throughout Europe’s financial crisis, investors scrambled to park their money in safe-haven assets, with the Swiss franc a popular port in the storm. This became a problem for Switzerland, as a strong franc hurt the country’s exports. In 2011, the central bank put a cap on the currency, pledging to stop it from appreciating beyond 1.2 francs to the euro. It has traded around that target rate ever since.
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