Forexpros – The U.S. dollar was down for a fifth day against the Swiss franc on Thursday, slumping to a fresh record low after the U.S.’s credit rating was put under review for a downgrade and amid expectations for further monetary stimulus by the Federal Reserve.
USD/CHF hit 0.8079 during European morning trade, the pair’s all-time low; the pair subsequently consolidated at 0.8151, shedding 0.34%.
The pair was likely to find short-term support at 0.8079, the day’s low and the pair’s record low and resistance at 0.8330, Wednesday high.
Late Wednesday, Moody’s Investors Service said that it placed the U.S. government’s Aaa bond rating on review for possible downgrade for the first time since 1995, citing “a small but rising risk” of a short-lived default, amid a standoff in the U.S. Congress over raising the country’s USD14.3 trillion debt ceiling.
The rating would likely be reduced to the Aa range and there is no assurance Moody’s would return its top rating even if a default is quickly cured.
The greenback was also weighed after Federal Reserve Chairman Ben Bernanke said that the central bank was examining several untested means to stimulate growth if conditions deteriorate, including another round of asset purchases or quantitative easing.
Testifying before lawmakers in Congress on Wednesday, Bernanke said policymakers expect the U.S. economic recovery “will likely remain moderate” with the unemployment rate falling “only gradually.”
Meanwhile, lingering concerns over sovereign debt contagion in the euro zone continued to underpin safe-haven demand for the Swissie.
Greece’s credit rating was cut three levels by ratings agency Fitch on Wednesday to CCC, its lowest grade for any country in the world, saying that a default was a “real possibility.”
Elsewhere, the Swissie was down against the euro, with EUR/CHF gaining 0.18% to hit 1.1603.
Later in the day, the U.S. was to release a string of economic data, including a report on retail sales, producer price inflation, as well as weekly government data on initial jobless claims.
Also Thursday, Fed Chair Ben Bernanke was to deliver the second part of his testimony on monetary policy in Washington.
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