ZURICH: The Swiss franc rose against the dollar on Tuesday, moving in tandem with a slightly-firmer euro, as attention turns to a meeting of the European Central Bank on Thursday.
The franc has largely tracked the single currency since the Swiss National Bank set a cap of 1.20 francs to the euro last September, after investors anxious about the euro zone crisis pushed the safe-haven unit up 20 percent in just a few months.
SNB chairman Thomas Jordan said the franc is still overvalued and the central bank remains "ready to defend the minimum exchange rate of the currency with unlimited purchases," he told German daily Handelsblatt in an interview.
"While we have become used to similar comments from top SNB officials they nevertheless help to clarify their stance on monetary policy. A softening of the lower boundary is NOT around the corner," said UBS economist Reto Huenerwadel.
Data due later this week will show how much the SNB had to spend in June to defend the franc cap, after foreign reserves jumped sharply in May.
Swiss Finance Minister Eveline Widmer-Schlumpf told an event on Monday evening the SNB could intervene indefinitely.
"They can do it as long as they want because the Swiss bank can't fail ... the only limit is inflation - if we have inflation, they should stop that," she said.
The euro was slightly firmer amid speculation the ECB might cut interest rates on Thursday after data on Monday showed the zone's jobless rate rose to a record high in May.
The franc was up 0.1 percent against the dollar to trade at 0.9531 by 0631 GMT compared to the New York close. The franc was flat at 1.2008 per euro.
Swiss manufacturing activity shrank much less than expected in June, data showed on Monday, but the index remained rooted below the growth marker, suggesting weakness in the neighbouring euro zone will weigh in the second half of the year.
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