Investing.com – The euro was down for a fifth day against the safe haven Swiss franc on Thursday, falling to a fresh record low after an Italian bond auction saw yields rise to the highest since 2008, adding to fears over sovereign debt contagion in the euro zone.
EUR/CHF hit 1.1489 during European morning trade, the pair’s all-time low; the pair subsequently consolidated at 1.1552, shedding 0.25%.
The pair was likely to find short-term support at 1.1489, the day’s low the all-time low and resistance at 1.1721, Wednesday’s high.
Earlier in the day, Italy auctioned EUR1.25 billion of five-year bonds at an average yield of 4.93%, the highest since June 2008 and up significantly from 3.9% in June.
The country also sold EUR1.71 billion of 15-year bonds at a record-high yield of 5.9%, compared to 5.34% from a previous auction.
It was the first sale of longer-term debt since Italy’s 10-year yield soared to a euro-lifetime high of 6.02% on July 12.
Italy is the euro zone's third largest economy and has the highest sovereign debt ratio relative to its economy in the single currency bloc after Greece.
Meanwhile, lingering concerns over sovereign debt contagion in the euro zone continued to underpin safe-haven demand for the Swissie.
Greece’s credit rating was cut three levels by ratings agency Fitch on Wednesday to CCC, its lowest grade for any country in the world, saying that a default was a “real possibility.”
The euro also pared gains against the U.S. dollar, retreating from a four-day high of 1.4281, to hit 1.4176, still up 0.09% on the day.
Also Thursday, official data showed that consumer price inflation in the euro zone rose by a seasonally adjusted 2.7% in June, unchanged from a preliminary estimate.
Core CPI, which excludes food, energy, alcohol, and tobacco costs, rose unexpectedly, increasing by a seasonally adjusted 1.6%. Analysts had expected core CPI to remain unchanged from a preliminary reading of 1.5%.
EUR/CHF hit 1.1489 during European morning trade, the pair’s all-time low; the pair subsequently consolidated at 1.1552, shedding 0.25%.
The pair was likely to find short-term support at 1.1489, the day’s low the all-time low and resistance at 1.1721, Wednesday’s high.
Earlier in the day, Italy auctioned EUR1.25 billion of five-year bonds at an average yield of 4.93%, the highest since June 2008 and up significantly from 3.9% in June.
The country also sold EUR1.71 billion of 15-year bonds at a record-high yield of 5.9%, compared to 5.34% from a previous auction.
It was the first sale of longer-term debt since Italy’s 10-year yield soared to a euro-lifetime high of 6.02% on July 12.
Italy is the euro zone's third largest economy and has the highest sovereign debt ratio relative to its economy in the single currency bloc after Greece.
Meanwhile, lingering concerns over sovereign debt contagion in the euro zone continued to underpin safe-haven demand for the Swissie.
Greece’s credit rating was cut three levels by ratings agency Fitch on Wednesday to CCC, its lowest grade for any country in the world, saying that a default was a “real possibility.”
The euro also pared gains against the U.S. dollar, retreating from a four-day high of 1.4281, to hit 1.4176, still up 0.09% on the day.
Also Thursday, official data showed that consumer price inflation in the euro zone rose by a seasonally adjusted 2.7% in June, unchanged from a preliminary estimate.
Core CPI, which excludes food, energy, alcohol, and tobacco costs, rose unexpectedly, increasing by a seasonally adjusted 1.6%. Analysts had expected core CPI to remain unchanged from a preliminary reading of 1.5%.