Dollar up vs Swiss franc but slips vs euro on data
The dollar hit 0.9347 Swiss franc, its highest level against the currency since Switzerland's central bank shocked markets on Jan. 15 by removing its cap of 1.20 francs per euro, after a Swiss newspaper report Sunday that the SNB was informally aiming for a rate of 1.05-1.10 francs per euro. The report cited sources close to the bank.
Data on Monday showing bank deposits with the SNB rose in the week ended Jan. 30 fueled speculation the central bank has been active in keeping a lid on the Swiss franc.
"There is plenty of scope for the (Swiss franc) to weaken," said David Gilmore, partner at Foreign Exchange Analytics in Essex, Connecticut. He said the report of the new exchange rate band gave investors a "a free pass" to sell the franc.
The dollar moved lower against the euro, meanwhile, after data showed US national factory activity for January as well as consumer and construction spending for December fell short of expectations. The reports followed Friday's weaker-than-expected headline US fourth-quarter gross domestic product reading.
The data "certainly adds to the narrative that's building out that the Fed may not hike in June, and may push (the hike) out beyond the middle of the year," said Richard Franulovich, senior currency strategist at Westpac in New York.
The Federal Reserve repeated last week that it would be "patient" in deciding when to raise benchmark borrowing costs from zero.
The dollar last traded 1.14 percent higher against the franc at 0.92745 franc, down from its session high of 0.9347 franc.
The euro was last up 0.52 percent against the greenback at \\$1.1339, and was up 1.3 percent against the franc at 1.0509 francs after also hitting a more than two-week high against the franc, of 1.0591 francs.
The dollar was last trading mostly flat against the safe-haven yen at 117.53 yen after hitting a two-week low of 116.64 yen hit earlier in the session.
The dollar index, which measures the greenback against a basket of six major currencies, was last down 0.28 percent at 94.54.
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