ZURICH: The Swiss franc ticked higher against the dollar on Friday, trimming some of Thursday's heavy losses on the back of a sharp euro retreat after the European Central Bank failed to announce immediate measures to ease tensions in the bond market.
Expectations based on comments from ECB president Mario Draghi that the ECB could enter the bond market to ease crippling borrowing costs for Spain and Italy had buoyed the euro - and the franc - against the greenback in recent sessions.
The franc has traded largely in tandem with the euro since the Swiss National Bank imposed a 1.20 franc per euro cap last September after a strong run up in the Swiss currency had threatened to push the Alpine economy into recession.
"We see euro swissie staying near the 1.20 level, because even in last week's environment of stronger risk appetite we didn't see the pair trading much higher," said Bank Vontobel head of FX research Sven Schubert.
The franc rose 0.1 percent against the dollar compared to the New York close, trading at 0.9849 by 0705 GMT.
The franc was steady against the euro at 1.2011 francs per euro.
"We don't see a big solution coming for the eurozone, which will keep the euro and the swissie under pressure against the dollar," said Vontobel's Schubert.
Currency traders will be watching U.S. employment data due later on Friday for any signs of pressure on the U.S. Federal Reserve to step in to support the economy.
"Weaker U.S. data in the next weeks will increase expectations for the Federal Reserve to act, which could push the dollar back to 1.25 against the euro, but economists here don't expect that for the moment," Schubert said.
