Swiss franc up against euro; CPI and SNB in focus

ZURICH: The Swiss franc strengthened against the euro on Tuesday as uncertainty over troubled European markets such as Italy and Spain continued to weaken the zone's single currency.

Comments from a European Central Bank policymaker that Europe's shared currency was not overvalued at current levels and resisting political pressure to weaken the currency sent franc above the 1.23.

"Comments have been cold water over calls from politicians out of the eurozone making a case for an active euro weakening early on. The comments have been enough to send EURCHF back above the 1.23 threshold," UBS economist Reto Huenerwadel said.

Closer to home, Swiss inflation data is due Tuesday at 0815 GMT.

Swiss National Bank chairman Thomas Jordan speaks in Geneva at 1000 GMT.

Jordan is expected to echo recent comments from SNB board member Fritz Zurbruegg, who said the franc remains overvalued and signalled the 1.20 cap installed in September 2011 to protect the Swiss economy would remain in place for some time.

On Monday, the SNB reported that Swiss sight deposits edged lower again last week to levels last seen in August in a sign of declining safe-haven demand.

Currency markets largely shrugged off news that North Korea conducted a third nuclear test.

The franc rose 0.1 percent against the euro to trade at 1.2321 by 0756 GMT compared to the New York close.

The franc fell 0.1 percent against the dollar to 0.9208.