ZURICH: The Swiss franc rose against the dollar on Wednesday, tracking a euro strengthening on expectations euro zone policy makers could conjure up fresh monetary stimulus measures to head off the developing crisis in Spain.
As Spain's access to credit markets grows increasingly tight, Spanish budget minister Cristobal Montoro appealed for European partners to help resuscitate Spain's flagging banks, spurring hopes for robust action from European partners.
That helped the euro hold a five day uptrend against the dollar after the single currency fell throughout the month of May, notching up a string of fresh two-year lows against the greenback.
The Swiss franc rose in the euro's train. It has tracked the single currency closely since the Swiss National Bank imposed a 1.20 francs per euro cap in September to stave off recession after safe-haven buyers almost pushed it to parity.
The franc has been trading almost flush on the cap for most of the last two months, though some market watchers are now questioning whether the SNB can sustain it while a swirl of euro zone crises continue to drive the single currency lower.
"We have to deal with the unpleasant reality that today it is a lot more probable the franc will again strengthen against the euro," Martin Janssen, professor of financial markets economics at the University of Zurich told a Swiss daily the Tages-Anzeigr.
"The increasing strength of the Swiss franc against the euro cannot be ignored with impunity. The longer you wait before reacting, the more expensive it will be."
The franc rose 0.3 percent against the dollar compared to the New York close to trade at 0.9615 francs per dollar by 0643 GMT.
The franc was steady against the euro at 1.201 per euro.
The European Central Bank is due to announce the outcome of its latest policy meeting at 1245 GMT, with the market consensus looking for interest rates to be held at 1 percent.
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