There are likely to be increased fears over the Swiss economy in the short term which will tend to keep the Swiss franc on the defensive.

The dollar found support above the 1.03 level against the Swiss franc on Wednesday and probed levels above 1.04 after the US data releases as there was a recovery in risk appetite.

The April Swiss KOF index weakened further to 1.20 from a revised 1.40 the previous month. There has been a sharp decline over the past six months and the April level was the weakest reading since late 2004 which will reinforce speculation that the economy is slowing rapidly.

There is likely to be some renewed speculation over an interest rate cut by the National Bank during the third quarter of 2008 which will tend to weaken the franc, but it regained some ground following the Fed rate decision.

The dollar found support below 1.0350 and again challenged resistance levels above 1.04 on Thursday with a peak close to 1.0450 as the US currency secured a wider advance.