Swiss franc flat against euro, SNB's ceiling holds

ZURICH: The Swiss franc held steady against the euro, trading weaker than the 1.20 mark the Swiss National Bank has vowed to defend even after a series of political setbacks in Europe over the weekend prompted investors to seek safety.

The euro slid against both the yen and the dollar as investors reacted badly to an unproductive European Union meeting in Poland.

A cancellation of a visit by Greek Prime Minister George Papandreou to the United States to chair an emergency meeting and a regional election defeat for Germany's chancellor Angela Merkel added fuel to an already tense euro.

After investors pushed the safe-haven Swissie up some 20 percent against the euro within the space of just a few months, on Sept. 6 the SNB implemented a cap on the franc at 1.20 per euro.

So far that ceiling has held, though some market participants have warned that a worsening of the euro zone debt crisis could lead speculators to test the SNB's resolve to defend that level.

"Euro/Swiss is glued to a reading just above 1.20. Technicals favour a higher dollar/Swiss from here," said UBS economist Reto Huenerwadel in a note.

The franc rose 0.2 percent against the dollar to trade at 1.2066 by 0738 GMT compared to the New York close.

The franc was flat against the euro.

Copyright Reuters, 2011