Swiss franc dips vs euro, Greece in focus

ZURICH: The Swiss franc on Wednesday pulled further away from a recent record high against the euro as investors await the outcome of Greece's vote on an austerity package.

At 0735 GMT, the franc was trading 0.2 percent lower compared to the New York close at 1.1971 per euro as traders largely expect Greece to back the plan.

"Developments in Greece will remain the key driver of euro/Swiss franc this week," Credit Suisse analyst Marcus Hettinger said in a research note.

The franc has gone from one record to another this year as investors have shunned riskier positions due to the uncertainty in the euro zone, while it has also benefitted from the robust health of the Swiss economy.

But the franc's rapid rise is a headache for the Swiss National Bank and monetary policy makers have warned its rise is likely to dampen Swiss growth this year as exports are likely to be affected.

"Today, the KOF leading indicator will be important to confirm if the strength of the franc is having only a modest negative impact on the economy," Hettinger said. "We stay neutral euro/Swiss franc over one month, expecting a range of 1.19 - 1.22."

The KOF indicator for June is due at 0930 GMT and the average estimate in a Reuters poll of analysts is for it to dip to 2.24 from 2.30.

Against the dollar, the franc was 0.2 percent firmer at 0.8302 per dollar.

"Dollar/Swiss franc dipped to a low of 0.8276 before recovering above 0.83 overnight, with technicals still highlighting downside risks. The next key support level is at 0.8130/50," Hettinger said.

Copyright Reuters, 2011