ZURICH: The Swiss franc strengthened against the euro, as renewed appetite for a Spanish short-term debt sale failed to inspire currency dealers.
"At this stage, the best possible news for the currency pair is increased risk appetite on international financial markets," UBS economist Reto Huenerwadel said.
Reassured by European Central Bank policies and eager to pick up higher-yielding debt, foreign investors spurred demand of almost 23 billion euros for a new 10-year Spanish bond.
Until recently, the franc had traded largely in lockstep with the euro since September 2011, when the Swiss National Bank imposed a 1.20 per euro cap after the soaring franc had threatened to push Switzerland's economy into recession.
After trading in a tight 1.20-1.22 range for most of 2012, the franc was sent sharply lower earlier this month after European Central Bank chief Mario Draghi said conditions in the euro area had improved and dashed expectations of an interest rate cut in the near term.
The franc rose 0.2 percent against the euro to trade at 1.2367 by 0724 GMT compared to the New York close.
The franc was virtually unchanged against the dollar.
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