ZURICH: The Swiss franc hovered against the euro and the dollar on Wednesday as growing doubts that the upcoming European summit would deliver concrete measures capped any moves.
German Chancellor Angela Merkel ruled out a suggestion of common euro zone bonds - favoured by France, Italy and Spain - and was quoted as saying on Tuesday that Europe would not share total debt liability "as long as I live."
"Trapped between a wide ranging set of comments from various European top officials and their negative impact on the euro and at least in part softer than expected US economic indicators euro-Swiss is going nowhere fast," said UBS economist Reto Huenerwadel.
"The result is a further decline in historic 1 month euro-Swiss volumes," he said in a note.
The Swiss franc, which the Swiss National Bank capped at 1.20 to the euro last September, has remained more or less glued to the level for the past three months, nailed down by lingering uncertainty as to whether politicians can find a lasting solution to the bloc's debt problems.
At its policy review earlier this month, the SNB reaffirmed its commitment to defend the cap using all necessary means and even dangled the threat of capital controls, should a further escalation in the crisis prompt a barrage of safe-haven flows.
Although Swiss growth was surprisingly strong in the first three months of the year, the SNB has warned that momentum is likely to slacken in the second half of the year.
The leading KOF economic barometer, due to be published on Friday, will give clues as to whether the ailing economic health of neighbouring countries is starting to drag on growth.
The franc was little changed against the dollar, trading at 0.9607 by 0544 GMT compared to the New York close.
The franc was steady against the euro, trading at 1.2006.
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