ZURICH: The Swiss franc was little changed against both the dollar and euro on Wednesday as investors stayed on the sidelines ahead of an Italian bond sale on Thursday and a weekend vote in Greece that could determine the single currency's fate.
The single currency had come under pressure the previous session as continued concerns over Spain's troubled banks pushed Spanish bond yields to a euro-era high.
"People (are) waiting for the election in Greece and the Italian bond sale. If the bond auction doesn't go well, it will increase insecurity in the euro even further," Bank Sarasin economist Alessandro Bee said.
However, upside potential in the Swiss franc is currently very limited as the SNB sticks vigorously to the franc cap. "The SNB is probably still intervening as it did in May," Bee said.
The franc has largely been trading in tandem with the euro since the Swiss National Bank imposed a cap of 1.20 per euro on the safe-haven franc to forestall a recession and deflation.
"This limit is absolutely necessary to defend our economy, which relies for every second franc on the international economy," Swiss Economy Minister Johann Schneider-Amman told a news conference on Wednesday, adding that the 1.20 cap was "not up for discussion".
The SNB holds its next policy review on Thursday. According to economists polled by Reuters it is expected to keep rates at near nil and maintain its cap on the franc.
The franc stood unchanged against the dollar at 0.9597 francs by 0640 GMT compared to the New York close.
The franc was also little moved against the euro at 1.2011 francs.
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