ZURICH: The Swiss franc rose against the dollar on Thursday, topping up the previous session's hefty 1.5 percent gains to hit a two-week high as speculation the Federal Reserve could reduce monetary stimulus weighed on the greenback. An uptick in risk aversion as investors mulled the possible effects of reduced U.S. bond buying weakened market sentiment, pushing U.S. and Asian equities lower along with commodities prices, and lifting U.S. Treasury yields, making the dollar less attractive to yield-hungry investors. "The euro-dollar in particular has been very sensitive to yield differentials and the widening in the U.S. Treasury yield advantage over German bunds has been consistent with a drop in the currency pair," said Credit Agricole analyst Mitul Kotecha in a note. The franc rose 0.3 percent against the dollar compared to the New York close to trade at 0.9594 per dollar by 0655 GMT. The franc also crept higher against the euro, consolidating an almost 1 percent rise in Wednesday trading as data showed the Swiss economy grew more than expected in the first quarter, vindicating the Swiss National Bank's policy on the franc. The SNB had imposed a 1.20 per euro cap on the franc in September 2011 after safe-haven buying amid the euro zone crisis had pushed the Swiss unit to record levels, hitting Swiss exports and threatening to push the country into recession. The franc climbed 0.1 percent against the euro to trade at 1.2426 per euro. "The SNB is in a really comfortable position at the moment: low inflation, relatively good growth and a franc that is far away from the 1.20 per euro limit," said Bank Sarasin economist Alessandro Bee.

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