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Swiss franc ticks up ahead of ECB decision

Thu, Sep 4 2008, 07:17 GMT
http://www.afxnews.com

ZURICH, Sept 4 (Reuters) - The Swiss franc ticked higher on Thursday ahead of the European Central Bank's interest rate decision, where markets await unchanged rates and a more pessimistic ECB assessment of the euro zone economy.

"The franc is rising because the market is speculating on early ECB rate cuts and risk aversion is generally increasing due to the gloomier economic outlook for Europe," said Ronald Plasser from Austria's RZB.

"If you look at the early indicators, the euro zone is doing considerably worse than Switzerland," he said.

The franc inched up 0.2 against the euro compared to the New York close, trading at 1.6005 per euro at 0655 GMT.<EURCHF=>

The franc rose 0.2 percent against the dollar to 1.1038 per dollar.<CHF=>

The ECB is widely expected to hold its benchmark interest rate steady at 4.25 percent, so markets will focus on ECB head Jean-Claude Trichet's view on the economy and the central bank's updated growth and inflation forecasts.

A slight majority of economists polled by Reuters expects the ECB to cut rates at least once by March 2009.

Markets price in unchanged interest rates for Switzerland for most of the next year.<0#FES:>

For polls, indicators and stories on the Swiss economy, click on: [CH-ECI-M].

tf.TFN-Europe_newsdesk@thomson.com

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