Swiss Franc Slides As European Shares Rise Ahead Of ECB Decision

The Swiss franc declined against its most major rivals in European deals on Thursday amid risk appetite, as traders await the outcome from the European Central Bank, due shortly, with heightened volatility in financial markets and plunging oil prices raising the prospect of further easing later this year.

The ECB is expected to keep all interest rates on hold, after slashing deposit rate to minus 0.3 percent at the December meeting. However, the ECB President Draghi may leave the door open to further action in the coming months to achieve price stability, if needed.

In economic news, figures from the Swiss National Bank showed that Switzerland's money supply growth slowed in December, after improving in the previous two months.

M3, the broad measure of money supply, rose at a slower pace of 1.6 percent year-over-year in December, following a 2.1 percent spike in November. In October, the rate of increase was 1.4 percent.

The franc showed mixed trading in the Asian session. While the currency rose against the pound and the greenback, it held steady against the yen and the euro.

In European trading now, the franc dropped to 116.16 against the yen and 1.0958 against the euro, off its early highs of 116.79 and 1.0929, respectively. The next possible support for the franc is seen around 114.00 against the yen and 1.12 against the euro.

Reversing from an early high of 1.0013 against the greenback, the franc weakened to a 2-day low of 1.0077. If the franc is likely to find support around the 1.02 zone.

On the flip side, the franc that reversed from an early 2-day low of 1.4289 against the pound advanced to 1.4174 at 2:30 am ET. The currency showed no clear direction in European deals.

Looking ahead, U.S. weekly jobless claims for the week ended January 16, Federal Reserve Bank of Philadelphia's manufacturing index for January, weekly U.S. crude oil inventories data and Eurozone consumer confidence index for January are due to be released in the New York session.