ZURICH: The Swiss franc tracked the euro lower against the dollar on Thursday after weak euro zone economic data and a sub par Spanish bond auction put the brakes on the single currency following a strong run up in recent sessions.
Investors cashed in recent euro gains ahead of a European Central Bank policy meeting later in the day, with the ECB widely expected to keep interest rates on hold at 0.75 percent. Revised euro zone growth data are due earlier in the session.
The franc was steady against the euro, having pulled back from a two month low the previous session after being driven down by announcements from Credit Suisse and UBS they would levy negative credit charges and fees on high franc deposits.
The banks announced the move in a bid to encourage customers to limit their holdings of the currency as rock bottom interest rates continue to dent profitability on client deposits.
Swiss consumer price data due later in the session are unlikely to have a strong effect on franc trading unless they differ widely from the month-on-month and year-on-year forecasts for 0.0 percent, said Informa Global Markets analyst Tony Nyman.
Though CPI is an important number, its effect will be limited as investors expect the Swiss National Bank to maintain its policy unchanged and to keep the 1.20 francs per euro cap for some time to come, he said.
"Markets have been focusing far more this week on Credit Suisse's decision to set negative deposit rates on accounts it deems appropriate," Nyman said.
"That has proved a Eur/Chf prop and an independent weight on the franc and this market will be mulling possible repercussions and response of the SNB at next week's meet."
The franc fell 0.2 percent against the dollar compared to the New York close to trade at 0.9276 francs per dollar by 0731 GMT.
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