Forex - USD/CHF pushed higher by euro zone uncertainty

Published 09/24/2012, 07:32 AM
USD/CHF
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EUR/CHF
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Investing.com - The U.S. dollar rose to a seven-day high against the Swiss franc on Monday, as uncertainty over whether Spain will request a bailout and weak German data underpinned demand for the safe haven greenback.

USD/CHF hit 0.9380 during European early afternoon trade, the pair’s highest since September 13; the pair subsequently consolidated at 0.9363, gaining 0.38%.

The pair was likely to find support at 0.9283, Friday’s low and resistance at 0.9417, the high of September 13.

The dollar found support following a report showing that Germany’s Ifo business confidence index deteriorated to the lowest level since March 2010 this month, amid ongoing concerns over euro zone’s debt crisis.

The German Ifo index fell to 101.4 from 102.3 in August, the fifth monthly decline in a row, compared to expectations for a reading of 102.5.

Meanwhile, uncertainty over whether Spain will request a full scale sovereign bailout weighed on market sentiment.

On Thursday Madrid is to present its draft budget for next year and announce structural reforms, while the results of bank stress tests are due on Friday. In addition, ratings agency Moody’s is expected to complete a ratings review on Spain later this week.

Over the weekend, Spain’s economy minister said the country would not rush to seek external financial aid, as pressure mounted on Spain to seek a bailout.

The Swissie was higher against the euro, with EUR/CHF slipping 0.16% to 1.2094.

Meanwhile, concerns over Greece persisted as Athens prepared to present a package of spending cuts demand by international lenders to euro zone officials at the end of this week, amid fears that the country’s budget shortfall could be larger than expected.

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