Forexpros – The U.S. dollar slid to a more than one-week low against the Swiss franc on Tuesday, as risk appetite staged a recovery after unexpectedly strong German business confidence data and as a Spanish bond auction met with solid investor demand.
USD/CHF hit 0.9307 during European morning trade, the pair’s lowest since December 12; the pair subsequently consolidated at 0.9309, shedding 0.68%.
The pair was likely to find support at 0.9237, the low of December 9 and resistance at 0.9398, Monday’s high.
Market sentiment was boosted after German research institute Ifo said its Business Climate Index rose to a seasonally adjusted 107.2 in December from 106.6 in November, confounding expectations for a decline to 106.0.
Elsewhere, Spain saw borrowing costs fall sharply at an auction of three and six-month government bonds.
Spain’s Treasury sold more than the targeted amount of EUR4.5 billion, auctioning EUR7 billion of three-month bonds at an average yield of 1.73%, down from 5.11% at a similar auction last month.
Meanwhile, EUR1.92 billion of six-month bonds were sold, at an average yield of 2.43%, down from 5.22% in November.
But risk appetite continued to be weighed amid uncertainty over the handling of the euro zone debt crisis after European Union finance ministers agreed Monday to provide EUR150 billion in loans to the International Monetary Fund, falling short of the EUR200 billion target.
Also Monday, European Central Bank President Mario Draghi reiterated that the bank’s bond purchasing program was temporary and “not infinite” and said the euro zone economy was likely to enter a recession by early next year.
In Switzerland, official data showed that the trade surplus widened more-than-expected in November on the back of an increase in exports.
The Federal Customs Office said Swiss exports rose by 3.8% year-on-year in November to CHF17.75 billion. The overall trade surplus was CHF3.00 billion.
The Swissie was fractionally higher against the euro, with EUR/CHF dipping 0.06% to hit 1.2176.
Later in the day, the U.S. was to publish official data on building permits as well as a report on housing starts.
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