The Swiss franc was roughly flat against the euro and the dollar on Monday as traders braced themselves for any further fall-out from the global liquidity crisis after last week's market rout.
The franc shot up against both currencies last week as markets unwound risky carry trades that had pressured the franc, with short-term borrowing rates soaring and equity markets plummeting in the wake of the US subprime crisis.
"Risk-aversion has diminished somewhat in Asian trading," said Marcus Hettinger, a Credit Suisse strategist. "But we'll have to wait and see how the US will open, while there is also a range of macro data from America." The franc was roughly flat against the euro, at 1.6412 francs per euro. Against the dollar, the franc was also roughly unchanged, at 1.1996 franc per dollar.
Markets will be closely looking at the Swiss National Bank, to see whether it will inject any further liquidity into the money market, after adding overnight funds twice in a row last week to soothe jittery markets.
Economists still expect the SNB to cling to its programme of tightening interest rates, but Swiss rate futures see less of a chance of an eighth consecutive quarterly 25 basis points rate hike in September than they did only days ago.
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