The Swiss franc firmed against the euro and the dollar on Wednesday after the head of the Swiss central bank called for vigilance in case currency weakness pushes up inflation. The franc was trading 0.07 percent higher against the euro at 1.6526 per euro, still within sight of the 8-1/2 year low at 1.6614 hit in Monday's session.
Technical analysts said the franc was now testing a support level of 1.6525 francs to the euro. "Below the latter (the) next support is at 1.6503/14," said 4Cast in a note. Against the dollar, the franc was trading 0.15 percent firmer at 1.2278 per dollar.
SNB head Jean-Pierre Roth said in an interview released on Tuesday evening the central bank has to be particularly vigilant as the weakness of the Swiss franc might push up inflation. The Swiss currency had immediately jumped on Roth's comments on Tuesday evening, gaining 0.2 percent against the euro and the dollar to 1.6537 per euro and 1.2288 per dollar.
An intervention to support the currency was not necessary at the moment, though the SNB did never fully exclude such a step, Roth told Swiss magazine Bilan in an interview in French. "The recent development is not ideal," Roth said when asked whether he was worried about the franc's decline.
Swiss input price inflation accelerated by more than expected in April, data showed on Monday, highlighting the need for the Swiss National Bank to stay on inflation alert.