ZURICH: The Swiss franc rose against the dollar for the second day in a row on Tuesday as expectations that European policymakers will agree on detailed plans to bolster their bailout fund gave a boost to risk appetite.
The euro zone debt crisis has put heavy pressure on the single currency, but the single currency edged higher against the dollar on Tuesday on hopes European policymakers would agree on concrete details to stem its debt crisis.
This in turn supported the franc, which has traded in a tight range against the euro since the Swiss National Bank set a cap of 1.20 francs to the single currency on Sept. 6, after safe-haven buying nearly pushed it to parity.
SNB policymakers have been out in force, with Philipp Hildebrand reiterating yesterday that the franc was still "highly valued" and he expects it to soften over time.
But analysts said developments in the euro zone would be the main driver for the currency pair going forward.
"With dark political clouds holding steady over the eurozone and with the above increasingly feeding through to our EU economic outlook, the pressure remains on EURCHF for now," said UBS economist Reto Huenerwadel.
"As such, the latest comments by top SNB officials provided no lasting support for the cross. International investors are not willing to short CHF on a large scale at this trajectory," he said.
The franc rose 0.3 percent against the dollar to trade at 0.9201 by 0739 GMT compared to the New York close.
The franc dipped 0.1 percent against the euro to trade at 1.2285.
Investors will also eye the UBS Swiss consumption indicator for further signs of a slowdown after the indicator last month touched a level only slightly higher than during the last two recessions.
Comments
Comments are closed for this article.