Forexpros — The U.S. dollar was sharply lower against the Swiss franc on Wednesday, as renewed concerns over the euro zone sovereign debt crisis and speculation over a fresh round of stimulus by the Federal Reserve boosted safe haven demand.
USD/CHF hit 0.8058 during European late morning trade, the pair’s lowest since August 26; the pair subsequently consolidated at 0.8090, tumbling1.29%.
The pair was likely to find support at 0.7891, the low of August 26 and resistance at 0.8241, the high of August 29 and a five-week high.
Concerns over the ongoing debt crisis in the euro zone came back into focus after an auction of Italian government debt on Tuesday met with tepid demand.
Earlier Wednesday, Germany’s cabinet approved a draft for legislation to grant new powers to the euro zone’s bailout fund, but Chancellor Angela Merkel still faced parliamentary opposition to the proposed changes.
Meanwhile, speculation mounted that the Fed may act to shore up the faltering U.S. economy after its extended two-day meeting in September.
The minutes of the central bank’s August policy-setting meeting, released Tuesday, showed that some policymakers pushed for more aggressive measures to stimulate growth, including buying more government bonds.
The Swissie was also sharply higher against the euro, with EUR/CHF dropping 1.32% to hit 1.1686.
Later in the day, payroll processing firm ADP was to release a report on U.S. non-farm payrolls. The U.S. was also to publish official data on manufacturing activity in the Chicago area and factory orders.
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