The Swiss National Bank (SNB) unexpectedly gave up its minimum exchange rate of 1.20 per euro today, ending a three-year-old policy designed to shield the economy from the euro area’s sovereign debt crisis.

In a surprise statement that sent shockwaves through equities and currency markets, the central bank ended its cap of 1.20 franc per euro and reduced the interest rate on sight deposits, deepening a cut announced less than a month ago.

The shift marks an attempt by the SNB to reinforce its defenses of the economy before government bond purchases by the European Central Bank that could crumple the franc cap.

In a chaotic few minutes on markets after the SNB's announcement, the franc broke past parity against the euro to trade at 0.8052 francs per euro before trimming those gains to stand at 1.0350 francs. It also gained 25 percent against the dollar to trade at 0.8900 francs per dollar.