ZURICH: The Swiss franc climbed against the dollar, with investors keen on safe-haven plays given concerns about financial aid to Spain's banks and an election in Greece at the weekend that may determine its future in the euro.
The franc has largely been trading in tandem with the euro against the dollar since the Swiss National Bank set a cap of 1.20 per euro on Sept. 6.
The euro was struggling to make headway against the greenback on Tuesday.
"Markets sentiment turned negative again after the initial rally following the news of the Spanish package," economists at SEB said in a note.
The SNB cited the need to shield the economy from recession and deflation as its justification for setting the cap. So far, however, the Swiss economy has seen better growth than expected, with private consumption and investments in the real estate sector party compensating for exporters' shrinking margins.
On Tuesday the Swiss government's economics secretariat (SECO) revised up its growth forecast for 2012 to 1.4 percent, from the prognosis of 0.8 percent issued in March.
The SECO cited a worsening of the euro zone debt crisis as the main risk to the Swiss economy.
The SNB holds its next policy review on Thursday. It may also revise up its growth view of nearly 1 percent, and it could also reinforce its pledge to take steps in addition to its cap to tame the strong currency.
The franc rose 0.25 percent against the dollar to trade at 0.9611 by 0548 GMT compared to the New York close.
"The market has yet to clear the 0.9658 resistance (The 8th June high)," technical analysts at Commerzbank said. "This will need to be cleared to target the 0.9772/84 zone (last week's high, January and February 2011 highs)."
The franc was flat against the euro at 1.2009.
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