ZURICH: The Swiss franc tracked the euro lower against the dollar on Wednesday as Australia's trade deficit hit a three-year high and data showed China's manufacturing industrial growth stabilizing at a slower pace, weighing on risk appetite.
The weak data were another blow to market sentiment already rattled by uncertainty about the timing of Spain's request for a bailout, pushing investors to sell euros and francs and pile into the safe-haven dollar.
The franc has tracked the euro closely since September 2011 when the Swiss National Bank imposed a cap of 1.20 francs per euro to head off the risk of recession or deflation.
"It's hard to get bullish when the numbers are so bad, especially in China and the euro zone," said Tony Nunan, an oil risk manager at Mitsubishi Corp, referring to weak manufacturing data released this week.
Spanish Prime Minister Mariano Rajoy said on Tuesday a request for European aid was not imminent, denying a report Madrid could apply for help as soon as this weekend.
The franc fell 0.2 percent against the dollar compared to the New York close, trading at 0.9383 francs per dollar at 0648 GMT.
The franc was steady against the euro at.1.2098 francs per euro.
Analysts at Credit Agricole said European Central Bank president Mario Draghi's pledge to eliminate tail risk in the eurozone has put a floor under the euro in the short term.
To defend weaker euro zone economies, the ECB has established the Outright Monetary Transactions, a plan to buy an unlimited amount of the bonds of crisis-hit euro zone economies in an effort to drag down their borrowing costs.
"However, we expect that the tendency for the euro to drift lower at least until Spain requests a bailout which will trigger the OMT," said the Credit Agricole analysts.
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