ZURICH: The Swiss franc looked set to climb against the dollar on Thursday, with the greenback at a three-week trough versus a basket of major currencies after the US Federal Reserve indicated it would retain its dovish policy stance.
The dollar index fell as low as 78.995 after Fed Chairman Ben Bernanke said the central bank would not hesitate to launch another round of bond buying, to drive down interest rates and revive a flagging economy.
Yet the euro zone's debt crisis -- and rising borrowing costs in a number of member states -- remained at the back of investors' minds.
"EUR/USD to remain range-bound in the short term but EUR weakness preferred on the crosses," Mitul Kotecha, Head of Global FX Strategy at Credit Agricole said.
The franc has generally been trading in lockstep with the euro against the dollar since Sept. 6, when the SNB imposed a cap of 1.20 on the strong franc, to stave off deflation and recession.
Safe-haven buyers anxious about the bloc's debts had pushed the franc up strong within the space of just a few months.
One excerption to the in-tandem trading took place on April 5, when according to electronic trading platform EBS the franc briefly surged past the 1.20 upper bound imposed by the central bank.
The franc was flat against the dollar, trading at 0.9085 by 0534 GMT compared to the New York close, off an intra-day peak of 0.9076 touched earlier in the session.
The franc was flat against the euro.
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