ZURICH, Feb 10 - The Swiss franc firmed against the dollar in early trade on Tuesday as markets looked ahead to the U.S. Federal Reserve's Chairman's testimony for clues of the Fed's latest stance on interest rate levels. The greenback last changed hands at 1.2307/10 francs, lower than the 1.2355/65 late in Europe on Monday, while the euro was flat at 1.5685/90 francs. Fed Chairman Alan Greenspan is due to testify to the Senate on monetary policy on Wednesday and Thursday, perhaps providing clues about the meaning of a recent change in wording on the timing of a potential rate hike. The Fed said late in January that it "can be patient", which appeared to dilute its previous pledge to keep rates low "for a considerable period".
UBS said in its daily market bulletin it would stay negative on the euro unless the currency breaks above the 1.5730 and, more importantly, 1.5748 resistance levels. "When looking for single factors with the potential of bringing new life to the euro rate, we are once more almost exclusively concentrating upon monetary policy," UBS said. "With chances for lower franc money rates very limited and with every move lower in the euro rate eventually resulting in a narrowing of the euro-franc spread, money markets become increasingly jittery," UBS added.//www.reuters.com