The Swiss franc gained ground alongside the euro against the greenback on Friday, on hopes the European Central Bank's bond buying plan can tackle the debt crisis. Yet gains in the common currency against the dollar were limited after data showed business activity in the bloc remained weak. The franc was up 0.1 percent against the dollar to trade at 0.9318 compared to the New York close, off an intra-day peak of 0.9305. The franc was flat against the euro at 1.2099.
After the Swiss National Bank set a cap of 1.20 per euro on the franc a year ago to prevent a recession, the franc spent months hugging the cap level. Because of the cap, the franc has also been moving in tandem with the euro against the dollar.
The ECB's bond-buying plan and the US Federal Reserve's launching of fresh monetary stimulus have given a boost to the euro this month, and since September 5 the franc has been on a weakening trajectory. Signs of business sector weakness in the euro zone, however, have taken some of the shine off of the euro's recent rally. "That sentiment isn't particularly friendly towards the euro is evident in the purchasing managers' index (PMI)," Commerzbank analysts said.
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