Forex Pros – The U.S. dollar erased gains against the Swiss franc on Tuesday, slipping to an eight-day low as growing concerns that the sovereign debt crisis in the euro zone could spread to the region’s core economies boosted safe haven demand.
USD/CHF pulled away from 0.8397, the pair’s highest since Friday, to hit 0.8336 during European early afternoon trade, shedding 0.25%.
The pair was likely to find support at 0.8274, the low of June 28 and the pair’s all-time low and resistance at 0.8442, the high of July 6.
Earlier in the day, Dutch Finance Minister Jan Kees de Jager said the possibility of a partial default by Greece in order to put the country’s debt on a more sustainable footing could no longer be ruled out, despite the European Central Bank’s opposition to such a move.
On Monday, European ministers reaffirmed their “absolute commitment” to safeguarding financial stability in the euro zone and said new measures to deal with the region’s debt crisis would be announced “shortly”, but set no deadline.
Meanwhile, the cost of insuring Spanish, Portuguese and Greek sovereign debt against default surged to euro-lifetime highs, while 10-year Italian bond yields rose to more than 6% for the first time since the inception of the single currency.
The Swissie was also higher against the euro, with EUR/CHF tumbling 0.93% to hit 1.1607.
Later in the day, euro zone finance ministers were to meet to hold further discussions on the debt crisis, while the U.S. was to publish official data on its trade balance. Also Tuesday, the Federal Reserve was to publish the minutes of its June policy-setting meeting.
Forexpros
