ZURICH: The Swiss franc drifted lower against the dollar on Friday following two days of strong gains and ahead of fiscal cliff budget discussions between US President Obama and Congressional leaders due to start later in the day.
Risk appetite plunged after data released on Thursday showed the euro zone fell back into recession in the third quarter, with fears of the fiscal cliff triggering automatic budget cuts in the United States and the escalation of violence in Gaza also rattling investor sentiment.
Against the euro, the franc held steady as Swiss National Bank chairman Thomas Jordan gave a cautious assessment of the Swiss economy in light of weakness in the euro zone, its biggest export market, and reiterated the SNB's commitment to the cap imposed on the Swiss franc last year.
"The reasons behind the setting of the minimum exchange rate in September 2011 retain their validity," Jordan said according to the text of a speech he was due to give in Zurich.
"The financial problems in many countries continue to provide a basis for potential safe-haven capital flows. In addition, at its current rate, the Swiss franc remains high and is weighing on the Swiss economy."
The franc has traded in a narrow range against the euro since the SNB imposed a 1.20 per euro cap to stave off a recession and deflation.
The franc fell 0.2 percent against the dollar compared to the New York close to trade at 0.9441 francs per dollar at 0738 GMT.
The franc was steady against the euro at 1.2043.
Comments
Comments are closed for this article.