Investing.com - The U.S. dollar erased gains against the Swiss franc on Thursday, easing off a four-and-a-half month high but demand for the greenback remained supported amid growing fears over the outlook for the euro zone.
USD/CHF pulled back from 0.9594, the pair’s highest since January 9, to hit 0.9546 during European morning trade, dipping 0.01%.
The pair was likely to find short-term support at 0.9531, the session low and resistance at 0.9594.
Investor sentiment was hit after data showed that manufacturing activity in the euro area contracted at the fastest pace since June 2009 in May, while service sector activity shrank at the steepest pace in seven months.
Germany manufacturing activity slowed to the lowest level in almost three years in May, sparking fresh fears over the impact of the euro zone debt crisis on the region’s largest economy.
A separate report showed that the German Ifo business climate index deteriorated significantly more-than-expected in May, pressured lower by uncertainty in the euro zone.
Market participants also remained risk adverse after Wednesday’s summit of European Union leaders made little signs of progress in tackling the debt crisis in the region.
Leaders reiterated that they want Greece to remain in the euro area, but urged the country to honor its commitments to austerity measures and the reforms demanded under its bailout program.
Meanwhile, U.K. data showing that the economy shrank more than initially estimated in the first three months of 2012, driven by the sharpest quarterly contraction in construction since the first quarter of 2009, added to gloom over the global outlook.
The Swissie was unchanged against the euro, with EUR/CHF trading at 1.2009.
Later Thursday, the U.S. was to release official data on core durable goods orders and initial jobless claims.
USD/CHF pulled back from 0.9594, the pair’s highest since January 9, to hit 0.9546 during European morning trade, dipping 0.01%.
The pair was likely to find short-term support at 0.9531, the session low and resistance at 0.9594.
Investor sentiment was hit after data showed that manufacturing activity in the euro area contracted at the fastest pace since June 2009 in May, while service sector activity shrank at the steepest pace in seven months.
Germany manufacturing activity slowed to the lowest level in almost three years in May, sparking fresh fears over the impact of the euro zone debt crisis on the region’s largest economy.
A separate report showed that the German Ifo business climate index deteriorated significantly more-than-expected in May, pressured lower by uncertainty in the euro zone.
Market participants also remained risk adverse after Wednesday’s summit of European Union leaders made little signs of progress in tackling the debt crisis in the region.
Leaders reiterated that they want Greece to remain in the euro area, but urged the country to honor its commitments to austerity measures and the reforms demanded under its bailout program.
Meanwhile, U.K. data showing that the economy shrank more than initially estimated in the first three months of 2012, driven by the sharpest quarterly contraction in construction since the first quarter of 2009, added to gloom over the global outlook.
The Swissie was unchanged against the euro, with EUR/CHF trading at 1.2009.
Later Thursday, the U.S. was to release official data on core durable goods orders and initial jobless claims.