ZURICH: The Swiss franc hovered near a four-month high against the euro on Friday as traders remained focused on continuing talks over the restructuring of Greek debt which have kept markets in their thrall for months.
The franc surrendered some of the previous session's gains against the dollar after tracking the euro higher against the greenback on Thursday as hopes firmed that Greece could come to an agreement with its lenders.
In Switzerland, Swiss Finance Minister Eveline Widmer-Schlumpf reassured other world leaders at the World Economic forum meeting in Davos that there is no leadership vacuum at the central bank after the resignation of former bank chief Philipp Hildebrand over a currency trading scandal.
The Swiss government is under pressure to confirm interim Chairman Thomas Jordan in the role quickly or see the markets try to test his resolve to defend the cap the SNB has imposed on the soaring franc.
"Unless the SNB allows the inflation differential with the euro zone to narrow... there are good reasons to look for a stronger Swiss franc," said UBS economist Reto Huenerwadel in a note.
"Be it the relative performance of the Swiss labor market, the favorable fiscal position, the huge current account surplus, etc. there are good reasons to be long the franc on fundamental grounds."
The economic outlook for Switzerland darkened further on Friday after the KOF leading indicator slipped into negative territory, adding to signs that the Alpine economy may face a brief recession.
The franc was steady against the euro comparred to the New York close, trading at 1.2063 francs per euro at 0809 GMT.
The franc fell 0.1 percent against the euro to 0.9214 francs per euro.
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