LONDON: The Swiss franc was little changed on Monday in thin pre-Christmas trading and could come under pressure against the dollar if US lawmakers fail to strike a deal before year-end to avert a fiscal crisis.
The White House on Friday tried to rescue stalled US budget talks after a Republican plan imploded in Congress, but there was little headway as lawmakers and President Barack Obama abandoned Washington for Christmas.
The franc last week hit its highest against the dollar since early May as an announcement of further asset-purchases by the Federal Reserve weighed on the US unit.
But that is countered by concerns over US lawmakers' ability to avert automatic spending cuts and tax rises in early 2013 - which perversely would send investors scurrying for the relative safety of the dollar in preference to currencies which tend to gain when global growth prospects improve.
The franc was slightly higher against the dollar at 0.9152 francs and was marginally lower against the euro at 1.2082 francs.
"You are more likely to see a dollar rally if we get a situation where we don't get a resolution of the fiscal cliff. If we do get a resolution, I think the dollar continues to grind weaker and that plays through the dollar/swiss," said Chris Eagle, global head of foreign exchange, at Marex Spectron.
"If we have a situation where you get some sort of stable resolution to the fiscal cliff - even if it's not exactly the deal that they wanted - ... I think the dollar stays soft and that probably means that dollar/swiss on a general basis continues to drift lower."
Center>Copyright Reuters, 2012
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