ZURICH: The Swiss franc edged up against the euro on Thursday and traded close to a one-month high against the dollar after the U.S. Federal Reserve kept its bond-buying stimulus plan in place. The franc had traded more or less in tandem with the euro since the Swiss National Bank (SNB) capped it at 1.20 per euro in September 2011. But it weakened to a 22-month low last week as confidence about the bloc's outlook grew. The euro held near a 14-month peak against the dollar on Thursday, supported by expectations that the U.S. central bank will keep its aggressive easing stance. Data signalling improving sentiment in the euro zone for the third month in a row also dashed expectations of a rate cut from the European Central bank next week, giving a further prop to the single currency. "In technical trading the newly found interest in European currencies dragged EURCHF lower accordingly," said UBS economist Reto Huenerwadel. In recent days the franc has edged back in the direction of the 1.20 mark and Sarasin economist Jan Poser said the rally in the euro against the franc was probably overdone. "We've seen the euro rebound, but the problems are still there and now it's moving back towards 1.20," he said. Data published on Thursday showed the SNB held 49 percent of its huge foreign currency reserves - which it built up to weaken the franc - in euros at the end of the fourth-quarter, up from 48 percent at the end of the third. Investors will also eye the Swiss purchasing managers' index on Friday for signs that rising confidence in the euro zone is supporting Swiss exports. Analysts in a Reuters poll expect it to rise to 50.5 points in January versus 49.5 points in the previous month. The franc was steady against the dollar to trade at 0.9109 by 0816 GMT compared to the New York close. The franc rose 0.1 percent against the euro to trade at 1.2342.

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