An increase in credit risks will tend to limit the scope for near-term selling pressure on the Swiss currency.

The dollar was unable to hold above the 1.0440 franc level on Wednesday and weakened following the Federal Reserve interest rate decision with lows below 1.0350. There was further Euro buying support below 1.62 against the franc with a challenge on the 1.6250 level.

There were no significant domestic incentives during the day with international interest rate trends the dominant market influence.

Overall risk appetite was still generally firm which curbed short-term support for the franc and there is still a sense of unease over the domestic economic trends

The dollar was initially little moved on Thursday, but the Swiss currency then strengthened to test levels around 1.03 while the franc pushed back to 1.62 against the Euro.

Risk conditions will still need to be watched closely as credit spreads have continued to widen over the past 24 hours. A further escalation in credit fears would curb franc selling and could trigger a sharp correction stronger.