ZURICH: The Swiss franc was steady against the dollar on Monday and was little changed against the euro as relieved markets digested news of Cyprus' last-minute deal with international lenders to secure its bailout.
The agreement, already endorsed by euro zone ministers, came just hours before a deadline to avert the collapse of Cyprus' banking system, which could have forced the island out of the euro zone.
The Swiss franc has shadowed moves in the euro throughout the fraught Cyprus bailout talks. The Swiss National Bank has reiterated its determination to defend a 1.20 cap against the euro, imposed 18 months ago to stave off recession, while the risk remains that the euro zone crisis could flare up again.
"About the safest thing to say when looking at the price action in euro-franc over recent days and weeks is that the controversial news out of the Eurozone has not resulted in an increase in franc long positions vs. the euro so far," said UBS economist Reto Huenerwadel in a note.
"In light of the above big moves by the SNB are not expected anytime soon either."
The franc was unchanged against the dollar compared to Friday's New York close, trading at 0.9406 per dollar at 0757 GMT.
The franc was also little changed against the euro.
Analysts said the euro might rise to around $1.3100 to $1.3150 in the near term from its current level of just under 1.30 as investors pare back bearish bets versus the single currency.
However, they were sceptical that there would be a sustained rally in the euro, given concerns about the euro zone's economic outlook.
UBS' Huenerwadel said business indicators due on Wednesday could highlight the stiff economic headwinds for some Swiss sectors continuing through the first quarter as economic weakness persists in the euro zone, Switzerland's biggest trading partner.
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