Forex - USD/CHF edges higher amid sustained E.Z. worries

Published 09/27/2011, 06:50 AM
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Investing.com – The U.S. dollar edged higher against the Swiss franc on Tuesday, as investors remained concerned over the ongoing debt crisis in the euro zone, supporting safe haven demand.

USD/CHF hit 0.9042 during European late morning trade, the daily high; the pair subsequently consolidated at 0.9039, rising 0.14%.

The pair was likely to find support at 0.8798, the low of September 18 and resistance at 0.9181, the high of September 22.

Expectations for radical steps to tackle the financial crisis in the euro zone were hit after Spain's finance minister Elena Salgado said plans to enlarge the euro zone’s bailout fund to EUR2 trillion were not on the table.

The euro was also weighed by speculation over an imminent rate cut by the European Central Bank, after a senior ECB policymaker said Monday that interest rates could not be ruled out.

In Switzerland, a report showed that the UBS consumption indicator fell by the most in nine years in August, dropping to 0.79 from a downwardly revised 1.28 the previous month as the strong Swiss franc weighed on consumer sentiment.

Also Tuesday, the Swiss KOF Economic Institute cut its 2011 forecasts for economic growth to 2.3% from 2.8%, citing the weakness in the U.S. economy, the debt crisis in Europe and the persistant strength of the Swiss franc.

Elsewhere, the Swissie was fractionally lower against the euro with EUR/CHF inching up 0.09%, to trade at 1.2214.

Later in the day, a U.S. report on consumer confidence was to be released, while Federal Open Market Committee member Richard Fisher was also due to speak.

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