The Swiss franc fell in tandem with the euro against the dollar on Tuesday as the single currency retreated from recent highs as concerns resurfaced around the outlook for the euro zone. "Caution will prevail in the near term as markets begin to question the veracity of the rally in risk assets registered over recent weeks," Credit Agricole analysts wrote in a note.
The franc fell 0.2 percent against the dollar to trade at 0.9099 by 0818 GMT compared to the New York close. Against the euro, the franc dipped 0.1 percent to trade at 1.228. Weak Spanish unemployment data, a lower-than-expected improvement in the euro zone sentiment index and political uncertainty in Italy and Spain all dragged the common currency lower. After more than a year of trading close to the 1.20 per euro cap imposed by the Swiss National Bank, the franc weakened through the 1.25 per euro mark in January for the first time since May 2011 on improving euro zone sentiment.
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