Ratings agency Moody's slashed Spain's debt rating on Thursday and threatened further downgrades after reducing its rating on Greek debt three notches earlier in the week.

"We are concerned there could be a further downgrade of Greek debt, with a large trenched expiring later in the month, which we don't think has been priced in," said Lugano-based portfolio manager Stefano Pisano.

The euro strengthened against major currencies last week as markets braced for an April interest rate hike by the European Central Bank after hawkish comments from its President Jean-Claude Trichet.

Trichet's comments also raised expectations for an interest rate rise in Switzerland, with interest rate futures now pricing in fully a hike in September with a certain chance of a move even in June

"The adjustments to Swiss franc rate expectations and possibly more importantly yet another bout of uncertainty related to the European peripherals weighed on euro/Swiss franc for most of the day on Wednesday," UBS analyst Reto Huenerwadel said.

The franc rose 0.3 percent against the euro compared to the New York close, trading at 1.2897 francs per euro at 0854 GMT.

The franc was 0.3 percent softer against the greenback at 0.932 francs per dollar, some way off last week's all-time high of 0.9197 francs to the dollar.