Forexpros – The U.S. dollar rose to a six-day high against the Swiss franc on Tuesday, as Standard & Poor’s downgrade warning on 15 euro zone countries supported demand for the safe haven greenback.
USD/CHF hit 0.9296 during European morning trade, the pair’s highest since November 28; the pair subsequently consolidated at 0.9266, rising 0.65%.
The pair was likely to find support at 0.9109, the low of December 2 and short term resistance at 0.9329, the high of November 25 and an almost eight-month high.
S&P put the long-term sovereign-debt ratings of 15 euro zone members, including Germany, Italy and Spain on negative watch and flagged a potential two-notch downgrade for France.
This means that there is a 50% chance of a downgrade within 90 days but the firm said it plans to announce any ratings changes “as soon as possible” after this week’s European Union summit.
The warning came after German Chancellor Angela Merkel and French President Nicolas Sarkozy outlined proposals aimed at halting the region’s debt crisis which will be discussed at Friday’s summit.
In Switzerland, a report showed earlier that consumer price inflation declined unexpectedly in November, easing for the second consecutive month.
The Swiss Federal Statistics Office said consumer price inflation dipped by 0.2% after easing by 0.1% in October. Analysts had expected Swiss consumer prices to rise by 0.1% in November.
Elsewhere, the Swissie was down against the euro with EUR/CHF gaining 0.42%, to trade at 1.2389.
Also Tuesday, the Swiss National Bank said that its foreign currency reserves declined to CHF229.3 billion in October from CHF245 billion the previous month.
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