Forexpros – The U.S. dollar erased gains against the Swiss franc on Wednesday, pulling back from the daily high as market sentiment strengthened amid fresh hopes for a breakthrough on dealing with the debt crisis in the euro zone.
USD/CHF pulled away from 0.9022, the daily high, to hit 0.8967 during European morning trade, sliding 0.21%.
The pair was likely to find support at 0.8880, Monday’s low and an almost one-month low and resistance at 0.9047, Tuesday’s high.
Market sentiment was bolstered by hopes that this weekend’s European Union summit could result in some progress in dealing with the debt crisis in the euro zone after German Chancellor Angela Merkel said the summit will mark an important step in resolving the region’s debt woes.
But the greenback remained supported after ratings agency Moody’s downgraded Spain’s sovereign debt rating by two notches late Tuesday and said it was maintaining a negative outlook on Spain’s rating to reflect the “downside risks from a potential further escalation of the euro area crisis.”
The announcement came one day after Moody’s placed France’s triple-A credit rating on review.
Elsewhere, the Swissie was down against the euro, with EUR/CHF rising 0.53% to hit 1.2424.
Later Wednesday, the U.S. was to publish government data on building permits, housing starts and consumer price inflation.
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