ZURICH: The Swiss franc slipped against the dollar on Tuesday, moving in tandem with the euro which pared gains recorded on Monday after Italy ended two months of political uncertainty by forming a government.
"Market relief following the formation of a new government in Italy was evident in the positive reception to Italy's bond auction yesterday," said Mitul Kotecha of Credit Agricole.
"Even so, a likely policy rate cut by the ECB and potential hints at future non conventional easing will be sufficient to prevent the euro from capitalizing much on the generally softer US dollar tone this week."
The safe-haven franc has broadly tracked the single currency since the Swiss National Bank introduced a cap of 1.20 per euro in September 2011 after a strong run up in the franc threatened to tip the country into recession.
The franc fell 0.1 percent against the dollar to trade at 0.9374 by 0710 GMT compared to the New York close.
The franc was flat against the euro at 1.2264.
The SNB reported a healthy profit for the first quarter of 2013 on Tuesday, as it recorded gains on its equity holdings and an appreciating dollar helped boost the value of its huge foreign exchange reserves.
At the end of March, the SNB said euro-denominated assets made up 48 percent of its portfolio, down from 49 percent at the end of 2012, while 27 percent was held in US dollars, down from 28 percent, and 9 percent in yen, up from 8 percent.
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