* Dlr, euro up vs Swiss franc; traders cite SNB intervention
* Dollar biggest beneficiary of SNB reports, rises vs euro
* Focus seen quickly switching soon to FOMC meeting
* Higher-than-expected demand at ECB 1-yr tender dents euro
(Adds quotes, updates prices, changes byline)
By Jessica Mortimer
LONDON, June 24 (Reuters) - The dollar shot higher against the Swiss franc on Wednesday as traders reported the Swiss National Bank was intervening by selling the Swiss for dollars and euros.
The dollar was the biggest beneficiary of the intervention reports, on which the SNB declined to comment. That saw the dollar index trade higher on the day before the U.S. Federal Reserve policy announcement later in the day.
The SNB intervention reports also distracted the foreign exchange markets from the fallout of the European Central Bank's first-ever one-year tender which was its biggest-ever liquidity injection and which weighed on the euro.
"It feels like the SNB has stepped up its approach and it has broadened the scope of its intervention," Brown Brothers Harriman currency strategist Audrey Childe-Freeman said.
"The spillover effect of this is that the dollar has strengthened and euro/dollar has turned lower, but I would expect attention to shift very quickly to the FOMC meeting," she added.
The dollar jumped two percent against the Swiss franc to hit a high of 1.0907 francs from around 1.066 francs before the reports emerged. Traders cited the SNB buying dollars around 1.0880 francs.
Earlier, market players cited the Bank for International Settlement buying euros on behalf of the SNB around 1.5125 francs, after it was seen in the market earlier at around 1.5010/15 francs. The BIS declined to comment.
The euro extended gains to rise as high as 1.5288 francs from around 1.5010 francs before the intervention reports. Its gains were not as big as the dollar's and the euro shed nearly a cent to a session low of $1.4005.
FOMC NEXT
The sharp moves triggered by the intervention reports temporarily shifted the foreign exchanges' focus from the looming policy announcement from the U.S. Federal Reserve.
The Fed, which makes its announcement at 1815 GMT, will also be under scrutiny for what it says about its asset buying programme aimed at keeping longer-term interest rates down.
The franc's lurch lower also overshadowed the swings that had been seen after the ECB allotted a higher-than-expected 442.24 billion euros ($612.8 billion) in funds at a flat rate of 1 percent.
The euro had weakened after the ECB tender, particularly against perceived higher risk currencies such as sterling and the Australian dollar.
"Today's 12-month ECB auction further blurs the boundary between the ECB's monetary expansion strategy and quantitative easing," said Lena Komileva, head of G7 market economics at Tullett Prebon.
"However, the Fed remains much more aggressive in its balance sheet expansion than the ECB and (there is) uncertainty about what the FOMC will say later today, in terms of assets purchases, the outlook for interest rates and the impact from the Fed's language on equities sentiment.".
(Reporting by Jessica Mortimer; Editing by Toby Chopra)