The Swiss franc hit a fresh one year high against the dollar on Thursday ahead of a scheduled Swiss National Bank interest rate decision due later in the session. The US dollar has sunk against other currencies in recent sessions as investors' are encouraged by hopes of an economic recovery, diminishing its appeal as a safe investment, and expectations US rates are likely to stay at rock bottom.
The SNB looks set to stick to its ultra-loose monetary policy at the policy meeting, due at 1200 GMT, as the risk of deflation and big uncertainties remain, despite an imminent end to recession. While the franc is not currently the focus of foreign exchange markets, this could change rapidly if the SNB sends any signals it is happy with the value of the currency, said UBS analyst Reto Huenerwadel. The central bank has intervened at least three times since March, effectively stopping the franc's rise against the euro and anchoring it in a range of 1.50-1.52 per euro.