Investing.com - The Swiss franc was little changed against the euro on Thursday after the Swiss National Bank kept interest rates unchanged and said it was still prepared to intervene in the currency markets to weaken the highly-valued Swiss franc.
Switzerland's central bank held its target range for three-month Libor in a range of -1.25% and -0.25% in a widely expected decision. It also maintained a -0.75% charge on sight deposits, effectively charging commercial banks for some cash deposits.
Negative interest rates are part of the SNB’s strategy for combating the strength of the franc, which is seen as a haven for investors in times of economic uncertainty.
"Despite depreciating somewhat in recent months, the Swiss franc is still significantly overvalued," the SNB said in a statement.
The SNB will "remain active in the foreign exchange market in order to influence the exchange rate situation, as necessary."
EUR/CHF was last at 1.0835 from around 1.0829 earlier, while USD/CHF rose to 0.9881 from 0.9863 earlier.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.35% to 97.67.
The dollar moved broadly higher on Thursday after losses in the previous two sessions as investors turned their attention to next week’s Federal Reserve meeting amid expectations for an imminent rate hike.
Demand for the dollar continued to be underpinned by expectations that the Fed is on track to raise interest rates for the first time since 2006 at its upcoming meeting on December 15-16.
Higher interest rates would make the dollar more attractive to yield-seeking investors.