ZURICH: The Swiss franc hovered near a six-week low against the dollar on Friday as weak Chinese output data and the prospect of budget cuts being triggered in the United States eased risk appetite and lifted the greenback. Safe haven buying had pushed the dollar higher against a basket of currencies in the previous session after Republicans and Democrats failed to agree on a deficit-reduction plan, potentially triggering $85 billion in automatic spending cuts. "The dollar will benefit from the budget issue in the United States, which could support more risk aversion in the market. Any escalation of the issue will push the dollar higher," said Unicredit forex strategist Roberto Mialich. The Swiss purchasing managers' index due out later in the morning is expected to confirm Thursday's GDP data, showing the Swiss economy and Swiss industry remain healthier than the euro zone. By contrast, overall purchasing managers' data for the euro zone is seen showing the currency bloc still contracting, though improved numbers are expected from France, Italy and Germany, with the latter expected to return to growth territory for the first time in a year. "After firming against the euro on uncertainty in the aftermath of Italian elections, the franc may be expected to remain steady around the 1.22 level despite the relative weakness of the euro against other currencies," Mialich said. "On the PMI front, there shouldn't be a dramatic impact on the euro-franc. (Swiss National Bank Chairman) Thomas Jordan's renewed support for the franc cap will keep the franc in a range." The SNB imposed a 1.20 per euro cap on the franc in September 2011 to shield the economy from recession and deflation. The franc was steady against the dollar compared to the new York close, trading at 0.9360 per dollar by 0757 GMT. The franc was little changed against the euro at 1.2235 pere euro.

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