The Swiss franc fell on Wednesday as rising yields in US bonds increased the greenback's allure and as traders positioned themselves for a quarter-point rate hike from the SNB on Thursday. Traders said the franc weakness was likely to continue.
"The SNB is going to raise rates by 25 basis points tomorrow. That's expected and has already been priced into the franc. We don't expect the franc to strengthen on the rate move," said investment strategist Sandro Baechli at bank Clariden Leu in Zurich.
"To the contrary, the franc is doing pretty well right now. We think the euro can strengthen more in next 12 months to around 1.68," Baechli said. The franc was 0.15 percent weaker at 1.6543 francs to the euro - still above the 8-1/2 year low of 1.6614 hit mid-May. Against the dollar, the franc was 0.1 percent weaker at 1.2431 francs to the dollar, close to the 3-1/2 month low against the greenback hit on Monday.
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