ZURICH: The Swiss franc fell against the euro on Monday as talk of a heavy International Monetary Fund rescue package for Italy buoyed the single currency.
However, an IMF spokesperson poured cold water on a report in the Italian daily La Stampa that said up to 600 billion euros could be made available at a rate of between 4-5 percent to give Italy breathing space for 18 months.
"There are no discussions with the Italian authorities on a programme for IMF financing," an IMF spokesperson said ahead of an expected IMF mission in Rome.
United States President Barack Obama is expected to press senior European Union officials in Washington on Monday to reach a solution to the emergency that rating agency Moody's said now threatens the credit standing of all European government bond ratings.
The franc ticked higher against the dollar on the back of euro strength. Despite the euro rise against the greenback, it remains close to a seven-week low struck during the Friday session.
Online foreign exchange service forexpeacearmy said the bearish euro-dollar bias remained intact, but mused that Monday could see the start of a euro-dollar retracement after the dollar's strong rise since the end of October.
The franc, which has tracked the euro closely since the Swiss National Bank imposed a cap of 1.20 francs per euro to protect the economy and stave off deflation, drifted lower after SNB vice chairman Thomas Jordan was quoted in a Sunday newspaper as saying the SNB could take more action if needed. "Calls for a more proactive SNB on the currency front have been taken up by both the various peer groups on the employer's and the employee's side over the weekend," said UBS economist Reto Huenerwadel in a note. "We thus find it safe to say that the political support for the SNB and their monetary policy remains in place.
The franc fell 0.3 percent against the euro compared to Friday's New York close, trading at 1.2355 francs per euro by 0801 GMT.
The franc rose 0.2 percent against the dollar to 0.9286 francs per dollar.
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