Swiss franc plunge against euro

ZURICH: The safe-haven Swiss franc ticked lower against the euro on Wednesday after the Greek government survived a vote of confidence in parliament taking it a step closer to securing a 12 billion euro aid package.

While the government has cleared the first hurdle, Greece still needs to pass two more tests enacting an austerity plan and the laws needed to implement it to win a new bailout and avoid sovereign default.

Hopes that the euro zone will find a way to prevent a Greek default have pulled the franc, which investors buy in times of uncertainty, back from an all-time high against the single currency hit on June 16.

But You-Na Park, currency strategist at Commerzbank in Frankfurt, said there was still a risk euro-Swiss could trade below 1.20 amid continuing uncertainty.

"If we don't see any decisions or real news in the next couple of days, it's possible we'll see a continuation in the sideways move in euro-Swiss," Park said.

"If we see some kind of solution for Greece, then we see some scope for the euro to move higher."

The franc fell 0.1 percent against the euro compared to the New York close, to trade at 1.2116 by 0710 GMT

Against the dollar the franc fell 0.1 percent to trade at 0.8420, as markets eyed a U.S Federal Reserve policy statement and a news conference later in the day.

Recent signs the economic recovery in the US is sputtering could force policy-makers to lower their quarterly forecast.

"(Dollar-franc) continues to falter at the .8547/54 resistance area (early May low and the 31st of May high).

This is likely to delay our positive outlook as we must allow for a retest of the .8348/27 supports," technical analysts at Commerzbank said in a note.

Copyright Reuters, 2011