ZURICH: The Swiss franc was little moved against the dollar on Thursday after shedding nearly 1 percent against the greenback in the previous session as worries about renewed stress in the European financial system spooked investors in thin trading.
Investors fleeing the escalating euro zone debt crisis fuelled a surge in the Swiss franc earlier this year, prompting the Swiss National Bank to set a cap of 1.20 francs to the euro to try to shield the economy from recession.
Data showing euro zone banks deposited a record amount at the European Central Back hit sentiment and sent the euro tumbling to a near one-year low against the dollar.
But the franc was little moved against the single currency suggesting the SNB's cap was still credible in the market.
"The latest news from the European financial system and in particular the increased balance sheet of the ECB has been portrayed by many market participants as a source of increased unease," UBS economist Reto Huenerwadel said in a note.
"In thin trading the dollar-Swiss moved by and large in line with the euro-dollar thereby limiting the directional moves in the euro-Swiss," he said.
The embattled European currency could come under further pressure again after Italy's 8.5 billion euros bonds sale later on Thursday.
By 0746 GMT, the franc was flat against the dollar to trade at 0.943 compared to the New York close.
The franc was largely unchanged against the euro, trading at 1.2193.
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