Until recently, the franc had traded largely in tandem with the euro since September 2011, when the Swiss National Bank imposed a 1.20 per euro cap after the soaring franc had threatened to push Switzerland's economy into recession.
After trading in a tight 1.20-1.22 range for most of 2012, the franc was sent sharply lower earlier this month after European Central Bank chief Mario Draghi said conditions in the euro area had improved and dashed expectations of an interest rate cut in the near term.
"Compared to what we have seen in the last days, forex markets seem calmer now. The euro has benefitted from the ECB statement on improving conditions but the push into the single currency is tailing off," said Sarasin economist Alessandro Bee.
"If European sentiment indicators coming this week show that improving financial conditions are filtering through to the real economy, that will improve sentiment on the euro further."
Analysts at Credit Agricole also said expectations for improved euro zone growth should provide support for the euro against other currencies such as the franc.
However, they added an agreement for aid to troubled Cyprus was unlikely to come before March. Traders say a worsening of perceptions over Cyprus could knock improving euro zone sentiment and hit the single currency.
The franc traded 0.2 percent lower against the euro compared to the New York close, at 1.24434 francs per euro by 0735 GMT. The franc rose 0.2 percent against the dollar to 0.9309 francs per dollar.