The Swiss franc extended gains against the dollar on Wednesday as the greenback weakened broadly ahead of the Federal Reserves interest rate decision. Policy makers at the Fed began their two-day meeting on Tuesday and many expect they will want to play down expectations of higher interest rates that have built in the market, for fear these will choke an economic recovery.
Investors took a cautious stance ahead of the Fed and lower equities had also supported the franc, UBS analyst Reto Huenerwadel said in a note. The franc rose some 0.2 percent against the dollar compared to the New York close to 1.0639 per dollar. The franc was little changed against the euro at 1.5030 per euro, close to the 1.50 per euro where markets see the Swiss National Bank's threshold for interventions. "The latest move in euro-franc thus has us and markets agonising at what level the SNB will eventually intervene again," Huenerwadel said.
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