ZURICH: The Swiss franc traded slightly firmer against the dollar on Tuesday, tracking a stronger euro and largely shrugging off weaker-than-expected second-quarter economic growth data.
Gross domestic product fell 0.1 percent in the second quarter compared with the first, from a revised figure of 0.5 percent for the first three months and missing average analyst forecasts for a growth rate of 0.2 percent.
The figures support the case for the Swiss National Bank to maintain the cap at 1.20 per euro cap it imposed on the soaring franc a year ago to ward off a recession.
"An unexpected shrinking," said Julius Baer economist Janwillem Acket. "The SNB has no other option but to continue with its policy, no matter how costly it is. It would have been even more costly not to do anything at all."
The franc was up 0.1 percent against the dollar to trade at 0.9521 by 0625 GMT compared to the New York close, paring bigger gains after the GDP data.
The franc was flat against the euro at 1.2007.
SNB Chairman Thomas Jordan confirmed his commitment on Monday to defend the 1.20 limit, saying a rise in the franc would pose a major threat to the economy.
The euro traded at $1.2609, within reach of an eight-week peak of $1.2638 set on Friday.
Ahead of a policy meeting on Thursday, European Central Bank President Mario Draghi said on Monday that the ECB's purchases of short-term sovereign bonds would not breach the European Union's taboo of directly financing euro zone economies.
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