By Lukanyo Mnyanda March 15 (Bloomberg) -- The Swiss franc rose to its strongest level in almost 17 months against the euro amid speculation the central bank will relax its resistance to currency gains as the economy recovers. The franc climbed as much as 0.2 percent as a government report showed annual producer and import prices declined at the slowest pace in more than a year in February, signaling that Switzerland’s deflation risks are diminishing as economic growth takes hold. The Swiss National Bank started selling francs last March to contain consumer-price declines and safeguard exports. “The data has been rather positive and if the franc doesn’t strengthen too much, the SNB will intervene less,” said Marcus Hettinger, a currency strategist in Zurich at Credit Suisse Group AG. “We could be in a new range” between 1.45 and 1.46 per euro, Hettinger said. The Swiss currency gained 0.2 percent to 1.4539 per euro as of 10:58 a.m. in Zurich, the strongest level since October 2008. It weakened 0.3 percent to 1.0605 per dollar. The franc strengthened to less than 1.46 per euro for the first time in more than a year last week, a day after the SNB reiterated it will act to prevent “an excessive appreciation” of the currency. It pledged last year to prevent “any appreciation.” Prices for products ranging from factory to farm goods as well as imports fell 1 percent from a year earlier after declining 1.3 percent in January, the Federal Statistics Office in Neuchatel said today. The economy may expand this year at a faster pace than previously projected, BAK economic research institute said March 11. To contact the reporter on this story: Lukanyo Mnyanda in London at lmnyanda@bloomberg.net

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