The Swiss franc will gain further support if risk appetite continues to fade although, the most likely outcome, is that buying will be limited from current levels.

The dollar was unable to push back above the 1.0450 level against the Swiss currency on Monday and dipped back to below 1.04 in New York with a trough around 1.0325 as Wall Street fell sharply. The franc strengthened consistently against the Euro during the day with highs around 1.6080.

Global equity markets were generally weaker which helped support the currency, especially as confidence in the financial sector was lower. The franc retained a firm tone in early Europe on Tuesday as caution prevailed

Domestically, a stronger than expected May Swiss inflation rate of 2.9%, a 15-year high following a 0.8% monthly increase in prices, also supported the currency with expectations that the National Bank will not be in a position to consider a cut in interest rates within the next few months.

The franc retained a firm tone and pushed to lows just below 1.03 against the US currency before consolidating around 1.0310. The franc also strengthened to highs near 1.6050 against the Euro before a retreat to 1.6090