Investing.com - The U.S. dollar was lower against the Swiss franc on Wednesday, but demand for the safe-haven greenback remained supported as concerns over the sovereign debt crisis in the euro zone persisted.
USD/CHF hit 0.9768 during European early afternoon trade, the daily low; the pair subsequently consolidated at 97.82, falling 0.22%.
The pair was likely to find support at 0.9736, Tuesday’s low and resistance at 0.9814, Tuesday’s high.
Market sentiment remained vulnerable after Germany’s Constitutional Court delayed on Tuesday its decision on whether the euro zone's bailout fund, the European Stability Mechanism, is compatible with German law.
The court said a decision could take months rather than weeks due to the complexity of the ruling. Without German backing, the ESM, which was originally meant to start on July 1, then delayed to July 9, cannot come into effect.
Meanwhile, Spanish Prime Minister Mariano Rajoy announced EUR65 billion of new austerity measures earlier in the day, in an effort to meet new budget-deficit targets agreed with euro zone partners.
However, market analysts warned that the fresh austerity measures were likely to drag Spain’s economy deeper in to a recession.
The fresh budget cuts come a day after the conclusion of the latest meeting of euro zone finance ministers.
While the ministers agreed to grant Spain an extra year through 2014 to reach its deficit reduction targets, they did not come up with a final figure for aid for the country's ailing banks but said some EUR30 billion would be available by the end of this month.
Elsewhere, the Swissie was steady against the euro with EUR/CHF inching up 0.01%, to hit 1.2010.
Also Wednesday, Germany saw borrowing costs fall to a record low at an auction of 10-year government bonds, as sustained concerns over the region’s debt crisis continued to boost demand for safe haven bunds.
Later in the day, the U.S. was to release official data on trade balance and crude oil stockpiles, followed by the minutes of the Federal Reserve’s June policy-setting meeting.
USD/CHF hit 0.9768 during European early afternoon trade, the daily low; the pair subsequently consolidated at 97.82, falling 0.22%.
The pair was likely to find support at 0.9736, Tuesday’s low and resistance at 0.9814, Tuesday’s high.
Market sentiment remained vulnerable after Germany’s Constitutional Court delayed on Tuesday its decision on whether the euro zone's bailout fund, the European Stability Mechanism, is compatible with German law.
The court said a decision could take months rather than weeks due to the complexity of the ruling. Without German backing, the ESM, which was originally meant to start on July 1, then delayed to July 9, cannot come into effect.
Meanwhile, Spanish Prime Minister Mariano Rajoy announced EUR65 billion of new austerity measures earlier in the day, in an effort to meet new budget-deficit targets agreed with euro zone partners.
However, market analysts warned that the fresh austerity measures were likely to drag Spain’s economy deeper in to a recession.
The fresh budget cuts come a day after the conclusion of the latest meeting of euro zone finance ministers.
While the ministers agreed to grant Spain an extra year through 2014 to reach its deficit reduction targets, they did not come up with a final figure for aid for the country's ailing banks but said some EUR30 billion would be available by the end of this month.
Elsewhere, the Swissie was steady against the euro with EUR/CHF inching up 0.01%, to hit 1.2010.
Also Wednesday, Germany saw borrowing costs fall to a record low at an auction of 10-year government bonds, as sustained concerns over the region’s debt crisis continued to boost demand for safe haven bunds.
Later in the day, the U.S. was to release official data on trade balance and crude oil stockpiles, followed by the minutes of the Federal Reserve’s June policy-setting meeting.