ZURICH: The Swiss franc hovered near a 19 week high against the dollar on Monday, after the US Federal Reserve embarked on an aggressive course of monetary stimulus last week.
The Fed's decision last week to launch a third round of quantitative easing to buy $40 billion a month of mortgage-backed securities until the jobs market improved substantially, has whetted investor appetite for risky assets, while weighing on the dollar.
"Markets are firmly in risk on mood," analysts at Credit Agricole said in a note.
Asian stocks touched their highest in more than four months on Monday and gold, oil and copper hovered near multi-month highs, after rallying late last week.
The franc rose to its strongest since May 10 in early intra-day trade, rising 0.2 percent above Friday's New York close to 0.9254 at 0606 GMT.
Since Sept. 5, the safe-haven franc has been on a weakening trajectory against the euro, in part because market stress due to the euro zone debt crisis has eased. Prior to that the franc had been hugging the 1.20 mark, delineated a year ago by the Swiss National Bank as an upper limit on the franc to stave off deflation and a recession.
At a policy review last week, SNB chief Thomas Jordan said the cap on the franc remained the right policy tool for now and that there was as yet no talk of an exit, despite indications tensions were abating.
After the Swiss economy, which for long seemed immune to the woes of the neighbouring euro zone, surprisingly contracted in the second quarter, the SNB also revised down its growth forecast for 2012 to 1 percent.
"Fundamentals speak for a higher EURCHF still," UBS economist Reto Huenerwadel said.
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