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The Swiss franc gained a little ground against the US dollar in early trading on Tuesday but the US currency held one-week highs amid expectations that the Federal Reserve would raise interest rates later in the session.

The dollar last traded at 1.2904/06 Swiss francs, inching down 1.2913/18 in late trading in Europe on Monday. The euro stood at 1.5457/65 francs, little changed from 1.5467/72 francs on Monday.

At its policy setting meeting on Tuesday, the Federal Reserve is expected to raise interest rates to 4 percent and perhaps add a hawkish tone to its accompanying statement, signalling more rate rises are in the offing.

In Switzerland, investors were looking ahead to the release of the Purchasing Managers' Index for October, due to be released at 0830 GMT, which was forecast by analysts to edge slightly lower to 56.5 points from 57.5 points.

That would point to continued expansion in the Swiss manufacturing sector, albeit at a slightly slower pace.

Copyright Reuters, 2005


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