Forexpros – The U.S. dollar was trading close to a six-week high against the Swiss franc on Wednesday, as concerns over the debt crisis in the euro zone escalated after an auction of 10-year German government bonds met with poor demand and after a string of weak euro zone data.
USD/CHF hit 0.9202 during European morning trade, the pair’s highest since Monday; the pair subsequently consolidated at 0.9195, rising 0.60%.
The pair was likely to find support at 0.9017, the low of November 10 and resistance at 0.9235, the high of November 17 and an almost six-week high.
Concerns over the euro zone’s debt crisis intensified after Germany’s Treasury sold just EUR3.64 billion in 10-year bonds out of the maximum EUR6 billion offered in an auction earlier.
Meanwhile, preliminary data released earlier showed that manufacturing activity in the euro zone slumped to the lowest level since July 2009 in November, falling to 46.4 from 47.1 in October.
Manufacturing output in Germany dropped to a 28-month low, underlining fears that the euro zone could be slipping into a recession.
Service sector activity in the single currency bloc improved slightly, but remained in contraction territory for the third consecutive month in November.
Also Wednesday, official data showed that industrial orders in the euro zone fell significantly more-than-expected in September, tumbling 6.4%, outstripping expectations for a 2.7% decline.
Market sentiment was hit earlier following reports saying that Belgium and France were in fresh talks over an existing rescue deal for lender Dexia, stirring worries about the potential for an increased fiscal burden on France, which could have implications for France’s AAA credit rating.
Elsewhere, a report showed that China’s November HSBC preliminary manufacturing PMI fell to a 32-month low, adding to fears over a ‘hard landing’ in the world’s second largest economy.
The Swissie was up against the euro with EUR/CHF slipping 0.31% to hit 1.2307.
Later in the day, the U.S. was to publish a string of economic data ahead of Thursday’s Thanksgiving holiday, including a government report on durable goods orders, the weekly report on initial jobless claims as well as data on crude oil stockpiles, inflation, personal income and personal spending.
Meanwhile, the University of Michigan was to release revised data on inflation expectations and consumer sentiment.
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