ZURICH: The Swiss franc trod water against the euro and the dollar on Thursday as worries about a looming US fiscal crisis and a European Central Bank policy meeting later in the day kept investors on the back foot.
By 0744 GMT the franc was trading close to a two-month low against the dollar at 0.945 while it was steady against the euro at 1.2059.
The European Central Bank is expected to keep interest rates unchanged at its meeting, although markets expect it to continue to signal a dovish policy.
"Market's scepticism of the euro for the time being remains a long running issue," analyst as Commerzbank said.
Despite some relief after Greece's parliament backed new austerity measures needed for the near-bankrupt country to secure bailout money, the euro was under pressure from a raft of dismal data from economic powerhouse Germany.
Exports fell at their fastest pace since late last year in September adding to the gloomy picture after data showing worsening business sentiment, rising joblessness and falling industrial orders.
Weakness in the neighbouring euro zone has left its mark on the Swiss economy and data released on Thursday showed joblessness in Switzerland ticked up to a non-seasonally adjusted 2.9 percent in October.
Still, the economy has been helped by a cap which the Swiss National Bank set on the soaring franc at 1.20 per euro more than a year ago. Since then, the franc has traded more or less in tandem with the single currency.
Data released on Wednesday showed the SNB's foreign exchange reserves dipped for the first time in eight months in October, showing the central bank has had to intervene less of late.
"What the October data on the SNB's FX reserves do signal, however, is situation whereby the SNB finds it materially easier to prevent EURCHF from moving below the 1.20 lower boundary compared to the summer months," UBS economist Reto Hunerwadel said.
Inflation also remained weak in September further supporting the case for the cap.
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