ZURICH: The Swiss franc seemed poised to touch a fresh 19-month low against the dollar on Wednesday, with investors anxious about the prospects for solving the euro zone's debt crisis pending a hearing by Germany's top court on the bloc's bailout fund. The German Constitutional Court has agreed to examine complaints about the EU's bailout fund and new budget rules but has not not given a date for its verdict, keeping investors on tenterhooks.
A delay in approving the fund could lead to more market turmoil, German Finance Minister Wolfgang Schaeuble said. The franc has generally been trading in lockstep with the euro since last September, when the Swiss National Bank set a cap of 1.20 per euro on the safe-haven unit. Investors anxious about the euro zone's fate had pushed the Alpine unit nearly to parity, raising the risk of deflation and recession.
Given intensifying concerns among investors that Greece or another country may have to abandon the euro, the SNB has had to intervene heavily to defend the cap.
"The-flare up of fiscal (and other) concerns in the Eurozone weighed on the external valued of the EUR for another day," said UBS economist Reto Huenerwadel. "By now USDCHF has approached the psychologically important level of 98.00."
The franc has hit a fresh 19-month low against the greenback each day this week.
The franc was flat against the dollar to trade at 0.9793 by 0542 GMT compared to the New York close.
The franc was equally unmoved against the euro at 1.2009.
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