Forexpros – The U.S. dollar slid to a two-day low against the Swiss franc on Tuesday, as fears over immediate U.S. credit downgrades eased but the greenback remained supported amid concerns over sovereign debt issues in the U.S. and the euro zone.
USD/CHF hit 0.9113 during European morning trade, the pair’s lowest since Friday, the pair subsequently consolidated at 0.9119, shedding 0.57%.
The pair was likely to find short-term support at 0.9075, the low of November 15 and resistance at 0.9235, the high of November 17 and a five-week high.
Risk appetite was boosted after ratings agency Fitch said that the failure of a U.S. congressional committee to agree on a package of measures to slash the country’s deficit was likely to result in a revision of the U.S. rating outlook to ‘negative’, rather than a downgrade.
In the euro zone, Spain’s Treasury sold EUR2.98 billion in three and six-month bonds in an auction which saw yields rise to 5.2% for the six-month bills, from 3.3% at a similar auction in October.
It was the first Spanish debt auction since the conservative party’s sweeping election victory on Sunday, but investors have remained jittery as plans on how to cut the deficit and restore market confidence have remained unclear.
Also Tuesday, official data showed that Switzerland’s trade surplus widened more-than-expected in October, totaling CHF2.15 billion, surpassing expectations for an increase to CHF2.06 billion.
The report said that exports rose 1.3% month-on-month, with exports of Swiss watches rising to a record high but most other industries continued to show falling exports as the strong Swiss franc weighed. Imports rose 1.4%.
The Swissie was almost unchanged against the euro, with EUR/CHF dipping 0.05% to hit 1.2365.
Later Tuesday, the U.S. was to release preliminary data on gross domestic product, while the U.S. Federal Reserve was to publish the minutes of its November policy meeting.
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