SINGAPORE - Trading floors here were thrown into chaos on Thursday afternoon as the Swiss franc suddenly spiked up against the euro.

The unexpected surge in the franc at around 5.30pm Singapore time came immediately after Switzerland abandoned, without any prior warning, its cap on the currency's exchange rate against the euro.

The move signals that the European Central Bank (ECB) may start its monetary stimulus programme as soon as next week, said Phillip Futures investment analyst Howie Lee.

The franc also jumped against the Singapore dollar.

The Swiss central bank had been capping the franc at 1.20 francs per euro since late 2011.

In response to scrapping of the cap, the franc jumped by nearly 30 per cent to as strong as 0.86 francs per euro. It later weakened slightly to around 0.96 francs per euro at 7pm on Thursday.

The shock move sent traders across the world scrambling to react.

"It was definitely a very sudden move, prices just plunged and the reaction time we had was very short. It was quite chaotic," said Phillip Futures director Grace Chan. DBS foreign exchange economist Philip Wee also said that the surge "definitely caused a commotion on the dealing floor".

"There was a lot of excitement, the immediate reaction was that something is coming next week from the ECB. This might be the biggest move of the year - unless the ECB shocks everyone," he said.

However, he added that the floor had quietened down by around 7pm.

Mr Alexandre Baradez, chief market analyst at IG in France, said in a Bloomberg report that the Swiss central bank's move was "extremely violent and totally unexpected, the central bank didn't prepare the market for it ... It's sparking panic across all asset classes."

The Singapore stock market had already closed by the time the currency spiked.

One Swiss franc could buy S$1.51 on Thursday evening, about 15 per cent more than the S$1.31 on Wednesday.