UPDATE 4-SNB won't exclude anything to cap soaring franc
* SNB signals fx swap moves; further steps if needed
* Says Swiss franc 'massively overvalued'
* Franc jumped 5 pct on Tuesday to close to euro parity
* Analysts sees more franc gains even if SNB intervenes
* Moot possible capital controls, negative interest rates (Adds Jordan, Danthine interviews)
By Emma Thomasson
ZURICH, Aug 10 (Reuters) - The Swiss National Bank is looking at all options as it faces rising pressure to take drastic action to bring down a soaring franc, after its steps so far have largely failed to dampen demand from safe-haven investors.
To counter what it called a "massive overvaluation", the Swiss National Bank (SNB) said on Wednesday it would flood the market with even more francs, including by conducting foreign exchange swap transactions, in a bid to make holding the currency less attractive.
It threatened further measures if necessary, stopping short of direct intervention for now after it ran up record losses in currency market forays last year, prompting calls for SNB Chairman Philipp Hildebrand to resign.
But market players said even renewed intervention would probably only cap gains in the short term. Extraordinary measures such as some kind of capital controls or negative interest rates would be needed to reverse the franc's rally, which is making Swiss exports less competitive.
When asked about these, SNB Board Member Jean-Pierre Danthine told the newspaper Le Temps: "Nothing is excluded."
"Among the measures mentioned in the press in recent days, one must admit that some are more practicable than others," he said, explaining that some lacked a legal basis, while others would be easy to circumvent or would lead to negative second-round effects.
Just a week ago the SNB announced a shock cut in interest rates to close to zero, but that prompted only a brief pause in the franc's climb, which has accelerated as global stock markets tumbled in recent days.
On Tuesday, the franc soared more than 5 percent against both the dollar and euro in its biggest one-day percentage move ever against both currencies amid a market rout.
It dipped on Wednesday after the SNB announcement, but soon resumed its climb against the euro , trading up 0.6 percent at 1.0335 at 1749 GMT. Against the dollar it traded up nearly a percent at 0.7293.
"With liquidity already ample in Switzerland, the Swiss authorities could be doing little more than pushing on a string," said Rabobank currency strategist Jane Foley. "The outlook for the euro-Swiss franc lies largely in the hands of the euro zone politicians rather than the Swiss authorities."
In a sign of how strong demand for Swiss francs is, Swiss interest rate futures crossed the 100.0 mark for the first time ever, Reuters data indicated. <0#FES:>
"We are not aware of any previous case in any major industrial country where three-month interbank rates or rate futures have priced in negative rates," Michael Saunders at Citi said.
Investors have flocked into safe-haven assets like the franc, yen and gold since the start of the financial crisis.
The franc's popularity has gained further during an 18-month euro zone debt crisis and rocketed this week after Standard & Poor's downgrade of the U.S. credit rating from triple-A hit the already waning appeal of the dollar.
Since markets went into a tailspin in July over political wrangling to avert a U.S. government default and fears Italy could be the next euro zone economy in trouble, the franc has jumped 17 percent against the euro and 16 percent against the dollar.
EXPORTS UNDER THREAT
The soaring currency has had little impact on the Swiss economy so far, with growth only forecast to slow slightly to 2 percent this year and unemployment steady at just 3 percent.
Exports of goods from watches to drugs to financial services have held up well, supported by sales to booming emerging markets and robust demand in neighbouring Germany.
But even globally diversified companies like drug firm Roche and watch maker Swatch have started to report an impact on earnings in recent months.
"We've been confronted with a seemingly endless increase in the Swiss franc," said Jim Singh, chief financial officer of food giant Nestle which said on Wednesday first-half sales took a 13.8 percent hit from the franc.
The currency jumped close to parity with the euro late on Tuesday, hitting a new record high of 1.0075 francs per euro as well as a new peak against the dollar of 0.7068, according to dealing platform EBS.
BACK TO THE 1970s?
Swiss business groups and trade unions have warned the recent dramatic appreciation could push the country back into recession, threatening tens of thousands of jobs if companies are forced to move production abroad.
In addition to renewed central bank interventions, other options that have been proposed include pegging the franc to the euro -- seen as highly unlikely in this fiercely independent country -- as well as capital controls.
"The SNB is clearly hesitant to act on the demand side after the unsuccessful intervention that ended in 2010, but on the other hand they may opt for negative interest rates as a further measure," said Sarasin analyst Ursina Kubli.
However, the SNB may be wary of taking this path, given that negative interest rates on assets held by foreigners had little impact when Switzerland tried them in the 1970s when the franc was surging as a result of the oil crisis.
"A broader negative interest rate could work," Nomura analysts wrote in a note. "One significant risk associated with this option is the impact on the Swiss banking sector."
The Swiss government last month rejected imposing capital controls or exporter tax breaks to help the economy, but said on Monday it was looking at new unspecified measures after an emergency meeting on the franc. (Additional reporting by Martin de Sa'Pinto, Caroline Copley, Katie Reid, Catherine Bosley, and Silke Koltrowitz; Editing by Catherine Evans/John Stonestreet/Susan Fenton)
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