The Swiss franc rose against the euro in early trading on Wednesday as investors trimmed their positions in the single currency amid indications that European interest rates could remain on hold for longer than expected.
The franc was trading 0.1 percent higher against the euro at 1.6368 francs, as the single currency recovered some ground. The franc was 0.2 percent lower against the dollar at 1.2129 francs per dollar.
The euro had slipped to a six-week low against the dollar in the previous session as investors reckoned losses suffered by banks in Europe stemming from subprime problems may prevent the ECB from lifting interest rates in September.
"Liquidity has been pumped in to the market and so rate expectations have been dampened," one Zurich-based analyst said. Economists still expect the Swiss National Bank 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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