ZURICH: The Swiss franc is poised to weaken slightly against the euro on Monday, with risk sentiment getting a lift af ter the outcome of Greek elections diminished the prospect of immediate break-up of the bloc.
The euro briefly hit a one-month high against the dollar, and European stock futures indicated that shares were set to surge. On Sunday Greek parties supporting a bailout won a slim parliamentary majority.
The euro's climb against the dollar meant that despite being a safe-haven currency, the franc rose against the dollar to a near month peak. That was due in part to the cap on the franc of 1.20 per euro set by the Swiss National Bank last September, which has caused the 'Swissie' to trade largely in tandem with the common European currency.
The SNB has threatened to take steps in addition to its cap on the franc if economic conditions worsen, and central bank chief Thomas Jordan even th reatened ca pital controls for what he sai d was the unlikely scenario of Greece quitting the euro.
Yet Greece and the euro zone still have to solve their budget woes, meaning the SNB's cap on the franc i s still in for severe tests by investors, according to experts.
"Needless to say that even with the Greek elections in the books, there major obstacles for the euro and hence euro-Swiss still looming," UBS economist Reto Huenerwadel said.
The franc was down a hair against the euro to trade at 1.2015 by 0545 GMT compared to Friday's New York close.
The franc rose 0.4 percent against the dollar to trade at 0.9447 per dollar compared to the New York close.
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