ZURICH: The Swiss franc rose against the dollar on Thursday as it tracked the euro higher on renewed demand for riskier assets as European stocks rose in early trade.
The franc has been moving largely in tandem with the euro against the dollar after the Swiss National Bank capped the soaring safe-haven unit at 1.20 per euro, to shield the economy from recession and potential deflation.
The SNB expects growth of just 0.5 percent next year and falling prices, as the strong franc and the economic downturn in the euro zone weighs on Swiss exports.
Swiss politicians from both the right and the left reiterated calls on Wednesday for the central bank to move the cap as far as 1.40.
The franc dropped versus the euro on Wednesday after the finance minister said the franc was overvalued and that a commission was looking at the possibility of negative rates.
Finance Minister Eveline Widmer-Schlumpf repeated there was a task force looking into the possibility of negative interest rates, so that the government's toolkit would be ready if a dire emergency arose.
Yet MPs voted down two motions calling for the legal framework for negative rates, meaning the government is not immediately tasked with proposing a change to the banking code.
The SNB has threatened to take further measures to weaken the franc if the economic outlook makes them necessary, and that warning has capped most gains in the Swissie.
"That helps keep the franc strength issue in focus and might well have aided the current bid. Overall we see steady trade within two trading days until Christmas," said Informa Global Markets analyst Tony Nayman.
The Swiss franc was trading up 0.5 percent against the greenback at 0.9308 at 0816 GMT compared with the New York close.
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