The president of the Swiss National Bank (SNB) has expressed concern that the strength of the Swiss franc could have a negative impact on exports.
Jean-Pierre Roth made his comments in a week that saw the dollar slide to 32-month lows against major European currencies.
"The franc appears to have retained its status as a safe haven in turbulent times," Roth said last week during a speech in Tuttlingen, Germany.
"But this role...is linked to considerable exchange rate risks and repeatedly confronts the Swiss export economy with problems. Therefore, no one would be unhappy if the franc were to shed some of that aura," he added.
A strong franc hurts the Swiss economy because more than 50 per cent of corporate earnings come from the export industry.
The weak dollar, coupled with a Swiss franc that has appreciated around four per cent in real terms against the euro in the past year, also has economists concerned that corporate earnings could suffer.
Investors last week shunned the dollar, pushing the euro to near parity with the US currency as fears about corporate governance, worldwide terrorism and falling stock markets came to a head.
"If the dollar weakens and the Swiss franc appreciates, it's not very good for corporate earnings, which is one of the reasons why Swiss stocks haven't performed well over the past two weeks," Willy Hautle, head of Investment Strategy at Zurich Cantonal Bank, told swissinfo.
On Wednesday, SNB board member Niklaus Blattner said that despite its latest slide he did not expect the dollar to "drop through the floor".
"However, our focus is not on the dollar right now, but on the euro," Blattner added.
About 70 per cent of Swiss exports are destined for the European market.
Strength of franc
Some analysts suggest the strength of the franc could force Swiss companies to become more competitive.
"In the US, firms have improved productivity and restructured their organisations to cope with the impact of a strong dollar over the past few years," commented Hautle.
"If Europe and Switzerland are faced with strong currencies, perhaps the pressure to restructure will increase. This is probably good news in the long run, despite the fact that it hurts in the short term," he added.
Roth has hinted that the SNB could cut short-term interest rates to protect domestic companies if the franc were to appreciate more against the euro.
But economists - who point out that the franc actually depreciated slightly against the euro this week - suggest such a move would be unlikely and expect the SNB to keep interest rates unchanged for some time.
"Without the appreciation of the euro and the franc," says Hautle, "we would probably have seen interest rates rising sometime in the next one to three months. But now, this has been postponed."
"We are predicting that the Swiss franc will remain stable vis-à-vis the euro and that the dollar will be on a par with the euro in the next one to two months."
by Karin Kamp