The Swiss franc hovered close to a 2-1/2-year high against the dollar on Friday as support for the US currency continued to give way after the US Federal Reserve's interest rate cut earlier this week. A 50 basis point cut in the fed funds rate on Tuesday has battered the dollar, tarnishing the appeal of assets denominated in the currency.
And traders see the trend continuing in view of expectations that the Fed may cut rates again this year. The franc was 0.34 percent firmer against the dollar at 1.1684 francs to the dollar, close to a 2-1/2-year low of 1.1679, and was 0.04 percent easier against the euro at 1.6489 francs per euro.
Market sentiment was clouded by a second wave of investment bank earnings reports which hit Wall Street on Thursday, revealing dramatically different degrees of success in weathering turmoil set off by the subprime mortgage meltdown. Bear Stearns reported a huge hit to earnings on bad debts on subprime loans but said the worst was over.
Goldman Sachs, on the other hand said betting against mortgage bonds helped it report its second-highest revenue ever in the third quarter. Federal Reserve chief Ben Bernanke warned on Thursday that there could be more defaults on US mortgages to come.