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Forex - USD/CHF inches lower after Moody’s downgrade Portugal

Published 04/05/2011, 06:17 AM
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Investing.com – The U.S. dollar dipped against the Swiss franc on Tuesday, after a one-notch downgrade of Portugal's sovereign debt rating by Moody's and reports that Portuguese banks were pressuring the government to seek a financial bailout.

USD/CHF hit 0.9206 during European late morning trade, the daily low; the pair subsequently consolidated at 0.9218, slipping 0.12%.

The pair was likely to find support at 0.9174, last Friday’s low and resistance at 0.9275, the high of March 30.

Earlier in the day, Moody's Investors Service downgraded Portugal's sovereign debt rating from A3 to Baa1 and warned that it expected the country’s incoming government would have to seek financial aid from the European Union as a matter of urgency.

Following the downgrade, yields on Portugal's 10-year government bonds rose to a euro-lifetime high of 9.03%.

The Swissie also found support as Brent crude continued to trade above USD120 a barrel, amid ongoing fears that unrest in North Africa and the Middle East could disrupt supplies.

The Swissie was also higher against the euro, with EUR/CHF shedding 0.35% to hit 1.3080.

Later Tuesday, the U.S. was to publish data on service sector growth while the Federal Reserve was to publish the minutes of its most recent policy setting meeting.

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