ZURICH: The Swiss franc drifted lower against the dollar on Friday, extending Thursday's drop from a four-month high as traders began to take profits on bets against the greenback.
The franc took its lead from the euro, which came under some pressure against the dollar after European Central Bank president Mario Draghi said the ECB's bond buying programme was necessary and in line with its mandate.
Against a basket of currencies, the greenback was on track for a loss of around 3 percent over the past two weeks, its biggest decline for such a period in more than a year.
However, some traders believe speculators could now be unwinding their short dollar positions and rebuilding their long holdings.
"We expect the dollar to get stronger in the next months, and also the Swiss franc, as weakening economies drive investors towards safe haven currencies," said Sarasin economist Alessandro Bee.
Bee also said he sees the dollar firming against the Swiss franc as the improving economic conditions in the United States contrast those in the struggling euro zone, Switzerland's biggest trading partner, creating a drag on the Swiss currency.
The franc continues to shadow the euro, the result of a 1.20 per euro cap imposed by the Swiss National Bank in September 2011 to stave off recession. However, the pair has traded in a wider band in recent months as risk appetite waxed and waned along with perceptions of global economic conditions.
A 24-hour strike in Greece which disrupted public transport provided markets a sharp reminder that the euro zone's troubles are not all behind it, denting risk appetite and keeping the pressure on the single currency.
The franc fell 0.2 percent against the dollar compared to the New York close to trade at 0.9234 per dollar by 0656 GMT.
The franc rose 0.1 percent against the euro to trade a 1.2314 per euro.
Comments
Comments are closed for this article.