Greek relief rally helps euro up vs Swiss franc

ZURICH: The Swiss franc fell against the euro on Friday, with riskier assets broadly helped by news European leaders agreed on a package to rescue debt-stricken Greece.

The euro rallied to a two-week high against the dollar in Asian trade, and both Swiss and European shares are set to open higher after an emergency summit of leaders of the 17-nation currency area pledged to conduct a second bailout of Greece with an extra 109 billion euros ($157 billion) of state funds.

Fears of a possible Greek debt restructuring have sent investors piling into the safe-haven franc, pushing it up to several record peaks in the first half of the year.

"Euro/Swiss profited from what appears to be a regained momentum among European politicians in addressing the concerns of international financial markets on European fiscal issues," UBS economist Reto Huenerwadel said in a note.

The franc was down 0.4 percent against the euro compared with the New York close, trading at 1.1815 at 0644 GMT.

The franc was down 0.5 percent against the dollar at 0.8200.

Trade data for June, released on Thursday, showed exporters slashed priced to defend foreign market share in the face of the strong franc and the ZEW indicator for July pointed to a slowdown in growth.

The next economic release will be the UBS consumption indicator on July 26.

Analysts at Credit Suisse said the franc was likely to fall against the euro in coming months, if risk aversion abated.

"The negative technical momentum indicates near-term downside risks (for euro/Swiss), but correction potential is large if risk aversion eases only slightly," Marcus Hettinger said.

An easing of tensions over the European sovereign debt crisis could see the franc fall back to 1.30 per euro.

Copyright Reuters, 2011