* Euro rises before Fed meeting later in the day
* Markets giving Greece benefit of the doubt for now
* Swiss franc falls, traders speculate SNB intervening
By Jemima Kelly
LONDON, Jan 27 (Reuters) – The euro rose for a second day against the dollar on Tuesday before a meeting of the Federal Reserve that may push back expectations for when U.S. interest rates will start to rise.
The single currency rose to $ 1.1282, up 0.4 percent on the day, moving further away from an 11-year low of $ 1.1098 hit early on Monday after it became clear that Greece had voted in a new anti-bailout government.
Investors are hopeful that the left-wing Syriza party leader, Alexis Tsipras, is willing to negotiate, easing concern that a confrontation with its international creditors could lead Greece to leave the euro.
The euro had risen to as high as $ 1.13455 earlier in the day, but gave back some of those gains in a volatile European trading session.
Last week was the worst for the euro in almost 4-1/2 years, with the single currency shedding over 3 percent, as the European Central Bank unleashed a 1.1 trillion euro quantitative easing programme to shore up the flailing euro zone economy.
“The fundamentals are well in place for a weaker euro but it’s come a long way and I think people are just fearful that with the ECB event there may be a consolidation period where corrective forces come into play,” said Ian Gunner, portfolio manager of the Altana Hard Currency Fund in London.
The dollar edged down across the board before a two-day Fed policy meeting that starts later on Tuesday. Investors were betting the Fed could respond to a recent string of rate cuts and easing measures by other major central banks by pushing back expectations of when U.S. rates will rise.
“In the next 24-48 hours it’s really about whether the Fed stages a bit of a fight-back or not,” said Adam Myers, European head of European FX strategy at Credit Agricole in London.
“If they stay silent, the market will think … that’s a green light (for U.S rate rises) so let’s sell euro/dollar,” he said, and the euro could break through $ 1.15 this week.
Switzerland’s franc fell against the euro, at one point tumbling over 2 percent to 1.03845, a level not seen since the minutes that followed the Swiss National Bank’s removal of its cap on the currency, with traders speculating that the SNB was intervening to weaken the currency.
The franc last stood at 1.01820 against the euro, down 0.2 percent on the day.
(Editing by Larry King and David Evans)