ZURICH: The Swiss franc fell to its lowest against the euro in a year on Monday as the single currency added to gains triggered late last week when the European Central Bank appeared to pull back from raising interest rates in the near term.
The franc dropped to 1.2233 per euro in early trading, a level not seen since December 2011, before paring losses and recovering to 1.2216 francs per euro by 0758 GMT, down 0.3 percent compared to Friday's New York close.
Markets will be watching out for industrial production data for November from the euro zone and Italy later in the morning, with any signs of improvement over the previous month expected to boost the single currency further.
Some traders said the franc was taking its lead from the yen, which has weakened sharply in recent months and was trading at a 20-month low against the single currency.
"Euro Swiss is playing catch up to euro yen which went up 20 percent in the last month. The next target for the euro Swiss is 1.2310," said one Zurich-based trader.
The franc was 0.1 percent weaker against the dollar, trading at 0.9141 per dollar, although it has gained ground against the greenback in the last week on signs the US economy may be improving, which pressure the safe haven dollar.
Traders will be keeping a close eye on US housing data later in the week.
"This data has improved significantly in recent months, which suggests that growth could pick up this year in the US, as long as Congress can agree on a deal at the end of February that doesn't harm the recovery," said Alpari analyst Craig Erlam in a note.
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