Tuesday, 13 November 2012 12:38
ZURICH: The Swiss franc slipped against the dollar on Tuesday, tracking the euro lower on renewed concerns about Greece's debt crisis.
The franc has been tracking the single currency since the Swiss National Bank imposed a 1.20 per euro cap on it more than a year ago to stave off a recession and deflation.
The euro dipped to a two-month low against the dollar on Tuesday after the euro zone and the International Monetary Fund failed to agree on a long-term plan to reduce Greece's debt, preventing disbursement of immediate aid to Athens.
"(The euro's) weakness can be attributed to the usual suspects, namely uncertainty surrounding Greece and Spain," said Mitul Kotecha, head of global forex strategy at Credit Agricole.
"The currency may gain a little respite today in the form of a small rise in the German ZEW investor confidence expectations index but it will be insufficient to turn the euro around in the short term."
The franc fell 0.1 percent against the dollar to trade at 0.9492 by 0659 GMT compared to the New York close.
The franc was flat against the euro at 1.2049, hovering around two-month highs against the single currency.
The amount of cash commercial banks hold with the SNB - a measure of how inclined banks are to find an ultra-safe home for their money - rose again slightly last week after dipping the previous week, data showed on Monday.
"The SNB did not have to deploy their balance sheet for another week to keep EURCHF above the lower boundary of 1.20," UBS economist Reto Huenerwadel said.
"At the same time to ongoing eurozone concerns make it difficult to look for a materially higher EURCHF accordingly."
Copyright Reuters, 2012