London- The Swiss franc posted its biggest daily drop against the U.S. dollar in nearly three weeks on Monday as investor concern over geopolitical risks eased and Japan posted solid economic data.
The franc fell 0.8 percent against the US dollar to 0.9694 francs, its biggest drop since July 27 according to Thomson Reuters data.
It gained more than 1 percent last week on escalating tensions between North Korea and the United States.
With Japanese second-quarter growth expanding 1 percent quarter-on-quarter, fuelled by rising consumption and capital expenditure, investors stepped in to buy risky assets after tensions over North Korea.
Meanwhile, the dollar edged higher against a trade-weighted basket of currencies after posting its biggest weekly drop in three weeks as expectations of US rate increases dwindled further after weak inflation data.
Renewed risk appetite also encouraged investors to borrow in currencies such as the dollar and the franc and invest in the euro.
The dollar was trading at 93.30, 0.3 percent higher from Friday’s session when it came under pressure after softer-than-expected US inflation data for July dampened expectations for another Federal Reserve interest rate hike this year.
The euro edged 0.2 percent lower to $1.17950 and was below a 2-1/2 year high of 1.1910 hit earlier this month.