Swiss franc rangebound, Spain debt fears cap gains

ZURICH: The Swiss franc was little moved against both dollar and the euro, caught between a slight uptick in risk sentiment on Thursday that saw Asian shares gain and persistent worries about Spain's debt woes.

Since the Swiss National Bank set a cap of 1.20 per euro on the safe-haven franc last September to avert a recession, it has largely been trading in tandem with the euro against the dollar.

Sentiment toward the euro has been bearish of late, given spiralling Spanish borrowing costs that have fuelled concerns the country will need a full bailout, and the franc sank to its lowest since late 2010 on Tuesday. It has recovered slightly since then.

"Trade will be dominated by external developments," said Informa Global Markets analyst Tony Nyman. "Dollar/Swiss is likely to range trade between 0.9800/1.000 in the next few days."

"Continued uncertainty and frustration over the lack of progress inside the euro zone over the debt crisis makes this a buy on dips," Nyman also said.

Prospects of the US Federal reserve resorting to more quantitative easing would prevent the franc from losing much more ground against the dollar, he said.

The franc fell 0.1 percent against the dollar to trade at 0.9886 by 0639 GMT compared to the New York close.

The franc was flat against the euro at 1.2011.