The Swiss franc was treading water against both the euro and the dollar on Monday, with news of Italy's austerity plan boosting risk appetite, though traders were hedging their bets ahead of Friday's big meeting of euro zone leaders. Italian Prime Minister Mario Monti on Sunday unveiled a 30 billion euro ($40 billion) package, raising taxes and increasing the pension age in a drive to shore up Italy's strained finances.
Buoyed by the news, European stock futures pointed to a higher open on Monday. The franc has generally moved in tandem with the euro since the Swiss National Bank capped it at 1.20 on September 6 after safe-haven seekers nearly pushed it to parity, threatening to rise Switzerland into recession.
The SNB set the cap citing a heightened risk of deflation and a weak CPI print could buttress speculation it might announce a shift. The franc was flat against the dollar at 0.9203 by 0742 GMT compared to the New York close. The franc was also virtually unchanged against the euro at 1.2364.
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