Forexpros – The U.S. dollar edged higher against the Swiss franc on Monday, as optimism over a deal to resolve the debt crisis in the euro zone was tempered by weaker-than-expected euro zone PMI data.
USD/CHF hit 0.8870 during European late morning trade, the daily high; the pair subsequently consolidated at 0.8865, gaining 0.47%.
The pair was likely to find support at 0.8701, the low of September 21 and resistance at 0.8952, Friday’s high.
Market sentiment remained supported after German Chancellor Angela Merkel and French President Nicolas Sarkozy said they would unveil a plan to recapitalize European banks and expand the firepower of the euro zone’s bailout fund at Wednesday’s European Union summit.
But risk appetite was dented after preliminary data showed that manufacturing activity in the euro zone slumped to a 27-month low in October. Service sector output in the single-currency bloc also declined to a 27-month low, adding to fears that the euro zone could be slipping into a recession.
The Swissie was almost unchanged against the euro, with EUR/CHF inching up 0.02% to hit 1.2265.
Also Monday, private sector data showed that manufacturing activity in China rebounded in October, after contracting in the three previous months, easing fears over a ‘hard landing’ in the world’s largest economy.
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