The Swiss franc stuck close to three-month highs against the dollar in early trade on Wednesday, with the U.S. currency under pressure from rising oil prices which threaten to hamper an economic recovery. The dollar slipped to 1.2445/49 francs from 1.2520/25 late on Tuesday. The euro eased to 1.5267/71 francs from 1.5310/06, falling close to a one-year low. Dealers said that safe-haven flows continued to support the Swiss currency in the wake of attacks in Saudi Arabia. "Higher risk-aversion and the favourable outlook for the Swiss economy are not boding well for the euro/Swiss currently," UBS said in a daily markets bulletin.
UBS noted that the Swiss purchasing managers' index for May -- while showing a decline overall -- was ultimately good news for the Swiss economy. However, they added the SNB was unlikely to be moved to raise interest rates at their June meeting. "The clouds over the Swiss economy, in the form of a continuously sluggish labour market, are simply too big to be overlooked by the SNB at their next announcement of monetary decisions for the third quarter," UBS wrote. "This is exactly what we expect to be confirmed by the next couple of SNB comments too: Postive economic growth -- yes; higher inflation on a sustained basis -- maybe; a more restrictive SNB policy -- not right now." Swiss CPI data for May is due on Thursday. Economists polled by gave a median forecast for the yearly increase in consumer prices of 0.9 percent, up from 0.5 percent in April.///