ZURICH, Aug 2 (Reuters) - The Swiss franc inched lower
against the euro on Friday and was unchanged against the dollar,
with the greenback being supported by hopes for an upbeat U.S.
nonfarm payrolls report later in the session.
Investors expect the U.S. data to show a solid increase in
July, which could make it more likely the Federal Reserve will
start scaling back its monetary stimulus later this year.
Closer to home, Switzerland's purchasing managers' index
(PMI), due at 0730 GMT, is expected to show a pickup in Swiss
manufacturing activity in July. Analysts polled by Reuters are
looking for a reading of 52.5 points, up from 51.9 points in
Switzerland's economy is in relatively solid shape,
underpinning safe-haven demand for the country's currency that
the Swiss National Bank capped at 1.20 per euro almost two years
ago to fend off deflation and recession.
'If the economic upswing continues in the second half of the
year ... the SNB will adopt a tighter monetary policy when the
euro-Swiss franc exchange rate reaches 1.30, and gradually scale
back its currency reserves,' J.Safra Sarasin forex strategist
Ursina Kubli said in a note.
If the upswing turned out to be even stronger, with a Swiss
PMI above 60 points by the end of the year, the SNB could
already start selling the currency reserves it piled up to keep
a lid on the franc when the exchange rate reaches 1.27 francs
per euro, Kubli said.
The franc was unchanged at 0.9372 per dollar at 0545 GMT,
compared to the New York close.
The franc fell 0.1 percent against the euro to trade at
1.238 per euro.
For polls, indicators and stories on the Swiss economy,
((Reporting by Silke Koltrowitz +41 058.306.7336; fax
Keywords: MARKETS SWISS FOREX
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