ZURICH: The Swiss franc gained against the euro on Tuesday, with uneasiness among financial market participants persisting due to concerns about euro zone debts and the US economy.
Although the 'Swissie' slumped almost 20 percent after the Swiss National Bank on Aug. 3 cut its key interest rate target to zero and began boosting money market liquidity, it has been on the rise again since last week as debt worries gain force.
The euro hit a seven-week low against the dollar on Tuesday, hurt by soft equities and after Italian bonds were sold on worries Rome is not doing enough to bring its debt under control.
European stock futures pointed to a lower open for equities for a third straight day on Tuesday.
"EUR/CHF remains under pressure," Commerzbank technical analysts said in a note. "The risk remains for losses to extend to 1.08."
"We look for signs of stabilisation around here. Although we are unable to rule out an extension to 1.0480," they also said.
Anxiety about the prospects for the global economy have prompted investors to pile into the safe-haven franc, sending it to near parity with the euro on Aug. 9.
Swiss inflation data for August is due at 0715 GMT and will shed light on how much leeway the SNB has to ease policy further in a bid to rein in the franc.
It has chosen to boost the amount of cash it makes available to banks, and could raise that amount further.
Another option would be interventions in the currency markets, a method it used in 2009 and 2010.
Swiss Economy Minister Johann Schneider-Ammann called on the SNB on Monday to take action to counter an overvalued franc. Influential lobby groups have also called for stronger measures such as a temporary exchange rate target.
The franc rose 0.3 percent against the euro to trade at 1.1058 by 0632 GMT compared to the New York close.
The franc rose 0.1 percent against the dollar.
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