The franc has been largely been moving in lockstep with the EU unit after the Swiss National Bank set a cap of 1.20 per euro on Sept. 6.

The euro touched a 2-1/2 month high versus the dollar last Friday and was trading close to that record on Monday, following the approval of further EU aid to Greece last week.

"The elements for consolidation of the situation in Europe have been put in place," Credit Agricole said in a note. "This sends two important messages to markets: sovereign and banking risks, including likely spill-over between the two, are more under control and there will be no imminent disorderly sovereign default in Greece."

The franc was down 0.2 percent against the dollar to trade at 0.8967 by 0822 GMT compared to Friday's New York close.

The franc was largely flat against the euro at 1.2044.

Despite the cap, the franc remains about 30 percent stronger against the euro than it was when Lehman Brothers collapsed in 2008. The Swiss export sector is particularly hit, and economic growth is set to slow to 0.5 percent this year as the strong currency and sluggish global demand bite.

Gross domestic product data for the fourth quarter of 2011 will be released on Thursday and will shed light on how much of an impact the strong currency is having.