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Forex - USD/CHF rises to 4-day high in risk-off trade

Published 10/09/2012, 06:15 AM
Updated 10/09/2012, 06:16 AM
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EUR/CHF
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Investing.com - The U.S. dollar rose to a four-day high against the Swiss franc on Tuesday, as concerns over the outlook for global economic growth and the handling of the debt crisis in the euro zone boosted demand for the safe-haven greenback.

USD/CHF 0.9384 during European late morning trade, the pair's highest since October 4; the pair subsequently consolidated at 0.9364, rising 0.34%.

The pair was likely to find support at 0.9311, Monday's low and resistance at 0.9415, the high of September 28.

Market sentiment weakened after the International Monetary Fund cut its global growth forecasts and warned of even slower expansion unless officials in the U.S. and Europe address threats to their economies.

The IMF said that the world economy will grow 3.3% this year, the slowest since the 2009 recession, and 3.6% next year, compared with July predictions of 3.5% in 2012 and 3.9% in 2013.

Investors also remained cautious amid uncertainty over how soon Spain may formally request a bailout lingered after euro zone finance ministers said Monday that Madrid did not need external financial aid yet.

Separately, European Central Bank President Mario Draghi earlier reiterated that governments cannot rely on the ECB to fix the crisis in the region and said that national reforms were vital.

Elsewhere, the Swissie was fractionally lower against the euro with EUR/CHF inching up 0.07%, to hit 1.2111.

Later in the day, German Chancellor Angela Merkel was to travel to Athens for talks with Greek political leaders. Meanwhile, finance ministers from the European Union were to hold a day of talks in Brussels.

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