ZURICH: The Swiss franc strengthened against the dollar, with the greenback broadly on the back foot as US President Barack Obama won re-election, ensuring that the Federal Reserve's quantitative easing will stay in place.
Republican challenger Mitt Romney conceded the election to Obama early on Wednesday morning after a bitterly fought battle.
Due to the cap of 1.20 per euro set by the Swiss National Bank on the safe-haven unit a year ago to prevent a recession, the franc usually trades in tandem with the euro against the dollar.
"As it slowly became apparent that the outcome of the US election was going Obama's way the US dollar slowly started to slide back after the strength of recent days, as markets slowly adjusted to the fact that there would be continuity with respect to the economic policies of the last four years," said Michael Hewson, a senior market analyst at CMC Markets.
Yet the problems that dogged Obama in his first term are still there to confront him again.
He faces a difficult task of tackling $1 trillion annual deficits, reducing a $16 trillion national debt, overhauling expensive social programs and dealing with a gridlocked US Congress that kept the same partisan makeup.
"What it doesn't change is the problems facing the US economy, and the roadblock that is the fiscal cliff," he said. "Once the euphoria of an Obama win has died down, this is likely to be the one thing that markets and investors focus their attention on."
At 0648 GMT, the franc was up 0.5 percent to 0.9381 against the dollar to compared to the New York close.
The franc flat against the euro at 1.2083.
In Switzerland, Wednesday sees the release of inflation data for October and details on the SNB's foreign currency reserves for last month.
A weak CPI print will confirm the SNB's ability to carry on its policy of capping the franc. It cited the risk of deflation as one of the reasons the step was necessary.
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