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Forex - USD/CHF hits 19-month high in risk-off trade

Published 07/23/2012, 06:22 AM
USD/CHF
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EUR/CHF
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Investing.com - The U.S. dollar climbed to a 19-month high against the Swiss franc on Monday, as concerns over the deepening debt crisis in the euro zone supported demand for safe haven investments.

USD/CHF hit 0.9939 during European morning trade, the pair’s highest since early December 2010; the pair subsequently consolidated at 0.9906, gaining 0.27%.

The pair was likely to find support at 0.9776, Friday’s low and resistance at 1.0052, the high of December 2, 2010.

The yield on Spanish 10-year bonds rose to a record 7.53% on Monday, well above the 7% threshold widely considered unsustainable in the long term, amid growing fears that Spain will need a full bailout after the state of Murcia followed Valencia in requesting financial aid from Madrid over the weekend.

The spike in borrowing costs came despite euro zone finance ministers approving a package of as much as EUR100 billion to bailout Spain’s banks on Friday.

Meanwhile, fears over a Greek exit from the euro zone resurfaced, amid worries whether Athens can meet the conditions of its international bailout ahead of a meeting with the Troika on Tuesday.

The Swissie was little changed against the euro, with EUR/CHF dipping 0.01% to 1.2009.

Neither the euro zone nor the U.S were to release any significant economic indicators on Monday, so markets looked set to remain focused on developments in Europe.

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