ZURICH: The Swiss franc on Friday moved off a touch from the previous session's two-week low against the euro as traders looked for bargains, after European Central Bank President Mario Draghi assured markets over the ECB's bond buying plan.
ECB President Mario Draghi said on Thursday that everything was in place for the bank to buy the bonds of struggling euro zone countries such as Spain and that conditions linked to it need not be punitive.
But Draghi, speaking after the ECB left interest rates unchanged at a record low 0.75 percent, offered no clues as to when Spain might make a formal aid request that would activate the programme.
"Draghi looked like a man on a mission yesterday in his bid to convince the markets that all is not as bad as is believed," said James Hughes, chief market analyst at Alpari.
Since the Swiss National Bank set a cap of 1.20 per euro a year ago to ward off a recession, the franc has largely traded in tandem with the single currency against the dollar. Signs of market tensions in the euro zone easing somewhat due to the ECB's bond buying pledge have caused the franc to weaken against the euro in the last month.
The Swiss economy started off the year surprisingly well, shrugging off the ill-effects of the strong franc. But the economy contracted in the second quarter and manufacturing data sank to its lowest since June 2009, a sign economists say may mean more tough times ahead.
A weakening of the economy reinforces the SNB's justification for the cap, which SNB chief Thomas Jordan has said is the right policy tool despite some signs that euro crisis tensions are diminishing.
The franc fell 0.2 percent against the dollar compared to the New York close to trade at 0.9317 by 0655 GMT.
The franc was flat against the euro at 1.2114 francs per euro, off Thursday's two week intra-day low of 1.2136.
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