ZURICH: The Swiss franc ticked down against the euro on Thursday as markets' expectations of an imminent rate increase by the European Central Bank continued to support the common currency.
However, ongoing concerns about risks for the global economy from the disaster in Japan and the turmoil in the Middle East limited the franc's fall.
"The euro-franc continues to centre on 1.30 and is reasonably bid still on yield differentials and expectations of an ECB hike in April," Informa Global Markets analyst Tony Nyman said. "That's been the dominating story for some time."
The franc fell 0.2 percent against the euro compared with the New York close, trading at 1.2996 francs per euro at 0738 GMT.
The euro received fresh support from recent ECB policy maker comments.
ECB Executive Board member Lorenzo Bini Smaghi said on Thursday the central bank's policy is to gradually raise interest rates, while another board member, Juergen Stark, said rates are exceptionally low, cementing expectations for an April interest rate hike. [nLOOKCBANK]
But analysts said the franc was unlikely to weaken sharply anytime soon. "The euro-franc remains sensitive to any development on geopolitical risk, and the overall risk scenario is not in favour of massive reversal of recent franc strength," said Unicredit foreign exchange strategist Roberto Mialich.
"Any resumption of risk aversion will see a stronger franc. Investors won't look to the Japanese yen (often also seen as a safe haven currency) as they are wary of another round of intervention to keep a lid on its strength."
The franc rose 0.2 percent against the dollar at 0.9167 francs per dollar.
Comments
Comments are closed for this article.