The Swiss franc ticked down against the euro on Wednesday ahead of the key Swiss growth barometer KOF as markets stayed wary of an intervention from the Swiss National Bank. There were still upward pressures on the Swiss franc, a Zurich-based trader said. "But the market does not dare to take it higher because of the SNB."
Markets were now awaiting the KOF leading growth barometer for April, the trader said. The KOF is expected to hit a fresh record low. The franc dipped 0.1 percent against the euro compared to the New York close, trading at 1.5052 per euro. The franc ticked up 0.1 percent against the dollar to 1.1414 per dollar.
SNB officials have emphasised repeatedly that the central bank would fight a renewed appreciation of the currency as it tries to fend off the risk of deflation. Nervousness has been rising in the market since the euro-franc dropped below 1.51 per euro. "There are question marks over the SNB's commitment to weaken the franc, though most market players expect the SNB to defend 1.50," Deutsche Bank analyst Henrik Gullberg said.
"For the KOF it will be interesting to see whether it will follow other leading indicators like ZEW and Ifo to show signs of a bottoming out or cautious turnaround," Gullberg said. "If it does not, then that must be seen to reinforce the SNB's resolve to weaken the franc to underpin economic prospects," he said.