The franc was also near the highest level in a week versus the euro on signs the Swiss economy is holding up amid a global slowdown following the collapse of the U.S. subprime-mortgage market. The figures stoked speculation the Swiss National Bank has no scope to cut borrowing costs this year.
Against the dollar, the franc rose as much as 1 percent, to 1.0277, the strongest since April 24, and was at 1.0316 by 4:27 p.m. in Zurich, from 1.0376 yesterday. The franc rose to parity with the U.S. currency for the first time on March 14. It was little changed at 1.6242 per euro.
An index of investors' and analysts' expectations for Switzerland's economy in the next six months rose to minus 60.4, from minus 71.4 the previous month, the ZEW Center for European Economic Research and Credit Suisse Group said today.
A government report on May 20 showed inflation pressures increased in April. Producer and import prices rose 0.7 percent from March, when they climbed 0.6 percent, the report showed, compared with a 0.5 percent increase forecast by economists in a Bloomberg survey.
SNB Vice President Philipp Hildebrand said May 19 that credit markets are now in the ``second half'' of the crisis sparked by turmoil in the U.S. mortgage market.
Traders reduced bets the central bank will lower borrowing costs this year, futures prices show. The implied yield on the three-month Swiss franc interest-rate futures contract due September was little changed at 2.87 percent, the highest this month.
The Zurich-based SNB left its target rate at a six-year high of 2.75 percent in March as it focused on the threat of inflation. Policy makers next meet June 19 in Geneva.
Swiss borrowing costs are the third-lowest in the industrialized world, and compare with 0.5 percent in Japan and 4 percent for the 15 economies using the euro. The U.K.'s 5 percent main rate is the highest among the Group of Seven nations, while South Africa's benchmark is 11.5 percent.
The country's government bonds fell, with the yield on the 3 percent note due January 2018 climbing 3 basis points to 3.03 percent. Yields move inversely to bond prices.