The Swiss franc traded flat on Wednesday after hitting a two-month low in the previous session on the perception that euro-zone interest rates would rise faster than those in Switzerland.
A recent run of strong euro zone data has boosted expectations the ECB might quicken the pace of tightening, whereas the Swiss National Bank is seen continuing its steady pace of 25 basis point rate hikes through the year.
"As long as markets perceive the SNB as shadowing the ECB's decisions a higher (euro) appears to be the logical consequence," UBS said in a research note.
The franc traded at 1.5665 per euro, virtually unchanged from the previous close of 1.5662 and only slightly higher than Tuesday's two-month low at around 1.5690.
The Swiss National Bank raised its benchmark interest rate to 1.50 percent last month, signalling that it would continue on its steady path of 25 basis points rate hikes, which have been fully priced in short-term debt rates.
Although the Swiss government last week raised its 2006 growth outlook after strong recent data, tame inflation gives the SNB little reason to step up the pace of tightening credit. The franc traded slightly flat versus the dollar at 1.2247 per dollar.
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