Investing.com - The U.S. dollar regained some ground against the Swiss franc on Monday, rallying over 1% as markets digested the Swiss National Bank's surprise policy statement last week that sent the franc broadly higher.
USD/CHF hit 0.8749 during European afternoon trade, the session high; the pair subsequently consolidated at 0.8692, jumping 1.09%.
The pair was likely to find support at 0.8449, the low of January 16 and resistance at 0.8808, the high of January 16.
The dollar dove more than 11% last Thursday when the SNB abandoned its three-year old 1.20 per euro exchange rate cap in a shock move designed to stave off deflation and prevent the continued appreciation of the safe-haven franc.
The euro also strengthened against the franc after losing over 12% last week. EUR/CHF advanced 1.41% to 1.3895.
Sentiment on the single currency remained vulnerable however, as the SNB's move indicated that it sees a high likelihood that the European Central Bank will implement quantitative easing measures at its upcoming meeting this Thursday.
Earlier Monday, official data showed that Swiss producer price inflation fell 0.4% last month, compared to expectations for a 0.6% decline, after a 0.7% drop in November.
Year-on-year, Swiss PPI declined 2.1% in December, confounding expectations for a 2.4% drop, after a 1.6% slide the previous month.