ZURICH: The Swiss franc weakened slightly against the euro and the dollar on Friday as investors were willing to take on more risk after the European Central Bank said the economy in the euro zone would recover later in 2013.
"Impulses for the franc are coming from outside Switzerland at the moment," Sarasin economist Alessandro Bee said.
"The ECB has signalled it will not lower interest rates further and that contributes to a rise in risk appetite," he said.
The ECB on Thursday left rates at 0.75 percent, following fledgling signs of life in the euro zone economy and with euro zone inflation still above target.
"What the market interpreted as rather 'hawkish' ECB comments lifted euro-franc through the 1.21 barrier," UBS economist Reto Huenerwadel said in a note.
The franc fell 0.2 percent against the euro to trade at 1.215 by 0745 GMT compared to the New York close.
The franc was down 0.2 percent against the dollar to trade at 0.9158 per dollar.
Swiss inflation data is due at 0815 GMT, with investors expecting a stable reading.
"The Swiss franc would only react if inflation moved into positive territory and could prompt a reaction from the Swiss National Bank. I think that can be ruled out at the moment," Bee said.
Huenerwadel also said he expected a soft CPI reading, cautioning, however, that an early start to retail mark-downs on clothing was likely to be reflected in the data.
The SNB set a cap on the Swiss franc at 1.20 per euro in September 2011 to fight deflation and prevent the country from falling into recession.
