ZURICH: The Swiss franc softened against the euro on Tuesday, due to rising risk sentiment after China's central bank became the latest player to take additional stimulus measures to support growth.
The central bank injected 265 billion yuan ($42.15 billion) into the market via reverse bond repurchase agreements, the second-largest gross injection on record.
"There has been a slight shift in risk appetite over night," said Alpari market analyst Craig Erlam. "The move is only likely to provide a temporary boost to the markets ahead of what is expected to be a disappointing corporate earnings season in the United States."
An easing of market stress due to the euro zone crisis has allowed the Swiss franc, which the Swiss National Bank capped at 1.20 per euro a year ago, to weaken against the common currency over the past month.
At 0619 GMT, the franc was down 0.3 percent at 1.2125 per euro compared to the New York close.
"It is still in an approximate 1.20/1.22 range and we do not see that breaking near-term," said Informa Global Markets analyst Tony Nyman. "Risk trades, which includes euro/Swiss, are showing a degree of resilience."
SNB Chairman Thomas Jordan said on Sept. 25 that it was as yet too early to say the euro zone's debt crisis had started to subside despite signs of market stress easing.
As part of the lessening of risk aversion among traders, the amount of cash commercial banks park with the SNB declined for the third week running last week.
The franc fell 0.1 percent against the dollar.
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