ZURICH: The Swiss franc held steady against the dollar in early trading on Friday as traders awaited US jobs data later in the day for further signs of softening in the world's largest economy.
A weak number for non farm payrolls could push the US Federal Reserve to increase its bond buying programme, now at $85 billion per month, which would weigh on the dollar, while a stronger number could eventually allow the Fed to scale back.
But any rise in the franc is likely to be kept in check after the European Central bank cut interest rates by a quarter of one percent and left the door open to more monetary easing if the economic climate in the euro zone deteriorates further.
"The general tone of the ECB's statement and press conference was dovish enough to be consistent with more monetary easing should the economic and inflation outlook warrant it," said Credit Agricole analysts in a note.
"All easing options clearly remain on the table, including additional rate cuts."
A cut in interest rates makes a currency less attractive to investors, as it reduces the yield on that currency with respect to others.
The Swiss franc has tracked the euro closely since the Swiss National Bank capped the franc at 1.20 per euro in September 2011 to help stave off recession and threat of deflation after safe haven buyers had bid the Swiss unit to near parity.
The franc was little changed against the dollar compared to the New York close, trading at 0.9350 francs per dollar at 0612 GMT.
The franc was steady against the euro at 1.2217 per euro.
Comments
Comments are closed for this article.