14 October 2004, 10:27  Swiss franc rises as trade worries push dollar

The Swiss franc rose against the dollar on Thursday as the greenback was plagued by worries that a sharp rebound in already high oil prices could widen the U.S. current account gap by more than expected. By 0545 GMT, the dollar traded at 1.2511/21 francs, from levels around 1.2601/05 late on Wednesday in Europe, while the euro last changed hands at 1.5464/69 francs, from 1.5454/56. Late on Wednesday, the dollar had climbed to a three-week high against the euro, helped by a fall in the price of oil. U.S. trade data for August are due later in the day. Oil prices rebounded to $54 a barrel on Thursday, and the London Brent crude for December gained 45 cents to $49.73 a barrel. The Swiss franc is likely to hold firm against the dollar over the next six months but will then start to rise as the U.S. recovery loses momentum and Swiss interest rates head higher, a poll of currency strategists showed last week. The Swiss National Bank has raised interest rates by 25 basis points twice so far this year, normalising ultra-low borrowing costs as the economy draws away from a double-dip recession. But some economists say the SNB can now take its time to increase interest rates again.////www.reuters.com

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