Forexpros – The U.S. dollar was trading close to a 10-month high against the Swiss franc on Wednesday, as concerns over the ongoing debt crisis in the euro zone supported safe haven demand.
USD/CHF hit 0.9478 during European morning trade, the pair’s highest since February 22; the pair subsequently consolidated at 0.9467, easing up 0.14%
The pair was likely to find support 0.9314, Tuesday’s low and resistance at 0.9601, the high of February 17.
Market sentiment has been hit in recent days by the view that last week’s European Union summit did not result in decisive plans to tackle the debt crisis in the region.
Earlier in the day, Italy’s Treasury sold the full targeted amount of EUR3 billion of five-year government bonds, at an average yield of 6.47%, up from 6.29% at a similar auction last month.
Following the auction, the yield on Italian 10-year bonds climbed to 7.17%, a level widely seen as unsustainable.
Meanwhile, the dollar remained supported after the Federal Reserve warned that market turbulence stemming from the crisis in the euro zone posed a threat to the U.S. economy but stopped short of indicating fresh stimulus measures to shore up growth.
In Switzerland, a report showed that economic expectations deteriorated to the weakest level in three years in December.
The ZEW institute said its index of economic expectations fell to minus 72.0 from minus 64.3 points last month.
The indicator for the assessment of the current economic situation deteriorated slipped 15.2 points to minus 20.0 in December, the weakest level since February 2010.
The Swissie was almost unchanged against the euro, with EUR/CHF inching up 0.03% to hit 1.2333.
Also Wednesday, official data showed that industrial production in the euro zone declined unexpectedly in October, falling for the second consecutive month.
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