The Swiss franc weakened against the US dollar on Monday as the greenback gained across the board as concerns abated about the health of the US economy. The franc was also slightly lower against the euro, trading at 1.6208 compared to Friday's New York close of 1.6248. Against the dollar, the franc was at 1.0992, compared to 1.0987 at Friday's close.
Analysts said prospects that the Korea Development Bank could invest in Lehman Brothers as well as hopes for a bailout for troubled home loan financiers Fannie Mae and Freddie Mac were helping the dollar.
"It's a dollar-driven thing," said Unicredit economist Armin Mekelburg. "The Swiss franc has a history as a secure haven and if the US financial market situation is improving there will not be as strong demand for it as there has been." Comments by influential investor Warren Buffett that he has no bets against the dollar also added to the dollar's upward momentum. Traders will be watching US housing data due this week for more direction.
Possible drivers for the franc this week could be a speech by Swiss National Bank Vice-Chairman Philippe Hildebrand on Wednesday as well as the UBS consumption index on Tuesday and the KOF leading indicator on Friday. KOF head Jan-Egbert Sturm was quoted in an interview with the NZZ am Sonntag newspaper as saying he did not expect the Swiss economy to fall into a recession and he predicted recovering growth sometime next year.
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