European session: franc is on the rise

The euro slid to a record low versus the Swiss franc and stayed within a cent of its weakest level this month against the dollar on concern European leaders may be unable to find common ground on a Greek bailout.
European Central Bank President Jean-Claude Trichet and German Finance Minister Wolfgang Schaeuble are at odds over whether Greek bondholders should be compelled to incur losses in the nation’s second bailout in 14 months.
“The focus has returned to Greece, which brings up a number of downside risks to the euro due to all the uncertainty about the bailout package,” said Chris Walker, a foreign- exchange strategist at UBS AG in London. “The euro will get some support from rate-hike expectations over the longer term, but we’re likely to see some weakness in the next few weeks.”
Luxembourg’s Prime Minister Jean-Claude Juncker, who leads the group of euro-area finance ministers, said in an interview on Radio Berlin-Brandenburg today that any bailout for Greece must include “voluntary” investor participation. Juncker is trying to bridge the gap between Germany’s Schaeuble, who wants Greek bondholders to accept longer maturities of up to seven years on the debt, and Trichet, who says imposing losses on creditors would be akin to a default.

President Trichet speaking at the LSE today at 14:00 GMT.