Forex - USD/CHF edges higher in risk-off trade

Published 10/03/2011, 06:53 AM
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Investing.com – The U.S. dollar edged higher against the Swiss franc on Monday, as sustained concerns over the sovereign debt crisis in the euro zone boosted safe haven demand.

USD/CHF hit 0.9129 during European morning trade, the pair's highest since September 26; the pair subsequently consolidated at 0.9085, edging up 0.09%.

The pair was likely to find support at 0.8963, the low of September 30 and resistance at 0.9781, the high of September 22.

Market sentiment weakened as concerns over a potential Greek default grew after Greece's Prime Minister said the country would not meet deficit targets this year.

Meanwhile, the greenback's safe haven appeal remained supported after Swiss National Bank President Philipp Hildebrand reiterated last week the bank's determination to enforce the franc's cap against the euro.

Earlier Monday, official data showed that Swiss retail sales fell unexpectedly in August, dropping 1.9% after rising by an upwardly revised 2.9% the previous month.

A separate report showed that manufacturing activity in Switzerland fell more-than-expected in September.

The Swiss SVME purchasing managers' association and Credit Suisse said that its purchasing managers’ index declined to 48.2 from 51.7 in August.   

It was the first time since August 2009 that the index fell below the 50 level that separates contraction from growth, as the strength of the Swiss franc and uncertainty in the global economy weighed.

Elsewhere, the Swissie was higher against the euro with EUR/CHF trimming 0.10%, to hit 1.2145.

Later in the day, the U.S. Institute of Supply Management was to publish data on manufacturing activity.

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