Forex Pros – The U.S. dollar edged higher against the Swiss franc on Monday, as concerns that the sovereign debt crisis in the euro zone could spread to Italy from Greece supported safe haven demand.
USD/CHF hit 0.8388 during European morning trade, the daily high; the pair subsequently consolidated at 0.8374, easing up 0.11%.
The pair was likely to find support at 0.8302, the low of June 30 and resistance at 0.8494, last Thursday’s high.
On Sunday, European Union President Herman Van Rompuy called an emergency meeting of senior policy makers to discuss plans for a second bailout package for Greece and assess the risk of the sovereign debt crisis spreading.
The meeting was called after the cost of insuring Italian sovereign debt against default rose sharply on Friday amid concerns over the country’s sovereign debt load, ahead of the release of European bank stress test results later this week.
But the greenback’s gains were limited by concerns over a slowdown in U.S. growth, after government data on Friday showed that nonfarm payrolls rose by just 18,000 in June, far below the 89,000 increase forecast by economists, with employers hiring the fewest workers in nine months.
The unemployment rate unexpectedly rose to 9.2%, the highest level in six months.
On Sunday, Swiss National Bank Chairman Philipp Hildebrand said price stability in Switzerland is not under threat at present, giving the central bank no reason to intervene to stem the Swiss franc’s steep gains.
“The Swiss economy is growing, unemployment is low and our country has little debt compared with other countries. We see neither deflation nor inflation risks at the moment. The national bank does not need to act,” he said.
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