ZURICH: The Swiss franc was weaker against the euro and the dollar on Thursday in thin trading ahead of the European Central bank's policy review and with US markets closed for a holiday, while traders also awaited Friday's US payrolls report. Political instability in Portugal, which has weighed on the euro in recent sessions, has also pressured the franc, which has traded in a fairly narrow range against the single currency since September 2011 when the Swiss National Bank imposed a 1.20 per euro cap to stave off a recession and deflation. No policy change is expected from the European Central Bank later on Thursday but a jump in yields in Portugal and other peripheral markets, is likely to ensure ECB President Mario Draghi maintains a dovish tone. "There is likely to be more movement after the ECB announcement, I expect Draghi will be a bit more cautious than at the last meeting as concerns increase over the global rise in interest rates," said Sarasin economist Alessandro Bee. "Rising peripheral rates in the euro zone could create some nervousness at the ECB, especially given the sell of in Portuguese bonds." Global interest rates have begun to push higher since US Federal Reserve Chairman Ben Bernanke last month said the central bank could wind down the pace of its bond buying program later this year if the economy improves as expected. Rising US Treasury yields have supported the dollar, which could get a further boost if US payroll data due on Friday confirm the US economic recovery is intact. The franc fell 0.3 per cent against the dollar compared to the New York close, trading at 0.9492 per euro by 0716 GMT, within striking distance of a four week high. The franc fell 0.1 per cent against the euro to 1.2329 per euro. "If we see a more dovish Draghi, it could also put pressure on the franc, especially if the ECB signals it is ready to take action to support market sentiment," Bee said.

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