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  • Nov 3rd, 2005
  • Comments Off on Swiss franc bounces back slightly from dollar surge
The Swiss franc recovered slightly against the dollar in early trading on Wednesday after the US Federal Reserve raised interest rates for the 12th straight time and indicated more rises would follow.

The dollar has stood strongly against the franc in recent sessions, driven by robust US data and ahead of the Fed's meeting.

The Fed raised its key rate to 4 percent on Tuesday, and expectations have grown that the European Central Bank, which holds a policy meeting on Thursday, could raise rates from 2 percent by the end of the year.

The Fed reiterated that monetary policy accommodation would likely be removed at a measured pace, indicating more hikes were in the pipeline.

The franc has witnessed a slew of strong Swiss economic data - boosting interest rate expectations - tarnished only slightly by Tuesday's purchasing managers' index, which eased in October to a seasonally adjusted 56.8 points from 57.5 points in September.

The dollar last traded at 1.2854/56 Swiss francs, down slightly from 1.2892/95 in late trading in Europe on Tuesday. The euro stood at 1.5469/75 francs, virtually unchanged from 1.5475/80 francs on Tuesday.

Copyright Reuters, 2005


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