ZURICH: The Swiss franc was flat against the euro and fell against the dollar on Monday as markets digested the outcome of last week's European Union summit and await the Swiss National Bank's quarterly monetary policy assessment this week.
Investors will eye the SNB meeting closely on Thursday to see if the central bank will adjust the cap on the franc it set in September as it seeks to stave off deflationary risks and protect the Swiss economy from a recession.
"As a result of the fairly negative Swiss inflation print last week, there is now increasing expectations that the SNB may lift the EUR/CHF floor towards 1.2500 when they meet this Thursday for the quarterly economic assessment," analysts at Credit Suisse said in a note.
"We agree that the odds for a raise of the EUR/CHF floor has increased, but a move as early as this Thursday remains a very close call," the analysts said.
At 0800, the franc was little changed against the euro compared to Friday's New York close, trading at 1.2358 per euro. Against the dollar, the franc was slightly weaker, changing hands at 0.9284 per dollar compared to 0.9242 on Friday.
The SNB imposed a cap on the franc at 1.20 per euro on Sept. 6, but speculation has mounted in recent weeks that it might shift the cap to weaken the franc further as data has pointed to a looming threat of recession and deflation.
Investors will watch more data out of Switzerland this week for more clues about the economy's health, including non-farm payroll data for the third quarter due at 0815 GMT.
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