ZURICH: The Swiss franc fell against the dollar on Monday to touch new 19-month lows not far from parity with the greenback as it tracked the weak euro down due to renewed concerns about the euro region's debt crisis.
The franc fell 0.4 percent against the dollar from the New York close to trade at 0.9924 by 0618 GMT, a level last seen in December 2010.
The franc has largely traded in tandem with the euro since the Swiss National Bank set a cap of 1.20 per euro last September as investors fleeing the single currency pushed the safe-haven unit up 20 percent in just a few months.
The euro hit a 25-month low against the greenback around $1.2103, creeping ever closer to a 2010 trough around $1.1876.
Spanish bond yields hit their highest levels since the euro was created, even as euro zone finance ministers approved the terms of a loan of up to 100 billion euros on Friday for Madrid to recapitalise its banks.
"There hasn't been much of a respite before eurozone concerns have resurfaced," said Mitul Kotecha of Credit Agricole. "Spain and Greece are once again in the spotlight, with the formal approval of a bank bailout for the former providing little solace as speculation of a full scale sovereign bailout grows."
The franc was steady against the euro at 1.2008.
A survey published on Sunday showed the finance chiefs of Swiss companies are increasingly doubtful of the central bank's ability to defend the cap given increasing pessimism about the euro zone debt crisis.
Deloitte said 37 percent of those surveyed saw the franc between 1.10-1.20 per euro in the next 12 months and 6 percent saw it below 1.10.
But UBS economist Reto Huenerwadel was sceptical.
"Such an outcome is highly unlikely, as such price action implies continued support from SNB on FX markets albeit at lower levels and with losses on the SNB's balance, and gains for franc long positions," he wrote in a note.
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