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Brexit worries spur safe-haven flows into Swiss franc, Danish crown

The new 50 Swiss Franc note is seen in a store after its release by the Swiss National Bank (SNB) in Bern, Switzerland April 12, 2016. REUTERS/Ruben Sprich/File Photo

LONDON (Reuters) - The Swiss franc hit an eight-week peak and the Danish crown held near one-month highs against the euro on Thursday, as investors bought safe-haven currencies on worries that Britain may vote to leave the European Union.

The Swiss franc and the Danish crown are seen as low-risk alternatives to the euro and euro zone assets. The euro is likely to suffer if Britain votes to quit the EU, though to a lesser extent than the pound.

Though bookmakers’ odds point towards a vote for Britain to remain in the EU, polls suggest a neck-to-neck race between the “Leave” and “Remain” camps ahead of the June 23 referendum.

“It now seems the FX market is starting to express an interest more broadly in safe-haven currencies,” said Chris Turner, head of currency strategy at ING.

“We are seeing demand developing for European safe havens of the Swiss franc, the Danish crown and the Czech crown.”

The Swiss franc climbed 0.3 percent on the day to 1.08860 francs per euro on trading platform EBS, its strongest since April 14. It has risen more than 1.5 percent this week, on track for its biggest rise since January 2015 when the Swiss National Bank lifted a cap on the franc against the euro.

Traders said further gains risk intervention by the SNB, whose currency reserves rose in May to $622.42 billion.

The Danish crown, which is pegged to the euro, was trading at 7.4355 crowns per euro, not far from a May 13 peak of 7.4345. A push above that level would take it to its highest since early 2015, when speculators attacked the peg in the wake of the SNB decision.

The crown is permitted to fluctuate in a corridor of 2.25 percent either side of a central rate of 7.46038 to the euro. In practice, the central bank has kept it within 0.5 percent and intervenes regularly in the currency market to stem the crown’s rise.

Additional reporting by Jemima Kelly,; Editing by Gareth Jones