The Swiss franc fell against the euro on Friday, adding to hefty losses in the previous session, which were triggered by surprisingly hawkish tones from ECB chief Jean-Claude Trichet. Markets are now keen to see whether SNB board member Thomas Jordan will strike a similar tone in a speech due later in the day.
"Following the ECB news, we are changing our interest forecast for the SNB and now expect a rate hike of 25 basis points in the next meeting in mid-June," said BNP Paribas economist Eoin O'Callaghan. By 0623 GMT, the franc was trading down 0.07 percent against the euro compared to the New York close, trading at 1.6199 per euro. The franc was near flat against the dollar at 1.0391 per dollar. The European Central Bank held its key interest rate steady at 4.00 percent on Thursday, but Trichet said the ECB may raise rates as soon as July.
SNB board member Jordan's speech is scheduled for 1000 GMT. SNB Chairman Jean-Pierre Roth said recently the SNB was very vigilant on inflation, which hit a near 15-year high at 2.9 percent in May.