Forexpros – The U.S. dollar dipped against the Swiss franc on Tuesday, but the pair remained in a tight range close to a four-month high as concerns over the financial crisis in the euro zone supported demand for the greenback as a safe haven.
USD/CHF hit 0.8798 during European morning trade, the daily low; the pair subsequently consolidated at 0.8801, slipping 0.16%.
The pair is likely to find support at 0.8685, last Friday’s low and resistance at 0.8927, the high of September 12 and a four-month high.
Concerns over the debt crisis in the euro zone remained in focus after Standard & Poor’s downgraded its debt rating on Italy by one notch, citing weak economic growth and increasing political difficulties.
Meanwhile, talks to discuss whether Greece has done enough to qualify for its next tranche of bailout funds ended Monday without reaching an agreement. Greece’s finance minister said the discussions would continue late Tuesday, adding that some work still needed to be done.
The Swissie remained largely unchanged earlier after the Swiss government cut its growth forecast for 2012 to 0.9%, citing a worsening world economic environment and the strength of the franc.
“An important factor is the unfavourable foreign trade conditions such as the significant slowing of the world economy along with the high valuation of the Swiss franc even after the introduction of a ceiling to the euro exchange rate,” the economy ministry said.
Elsewhere, official data showed that Switzerland’s trade surplus narrowed more-than-expected in August, as the strong Swiss franc weighed on exports.
The Swissie inched higher against the euro, with EUR/CHF dipping 0.05% to hit 1.2064, trading close the 1.20 targeted exchange rate imposed by the Swiss National Bank on September 6.
Later in the day, the U.S. was to publish government data on building permits and housing starts.
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