By FX Empire.com

The pair advanced for the third day as risk aversion in markets boosted demand on the dollar as a safe haven amid speculations the Swiss National Bank may intervene to halt the franc’s appreciation. The dollar rose to one-month high versus the franc as the tensions stemming from the euro area triggered safety demand on the dollar, noting that interventions from the SNB and BoJ made the greenback the most attractive refuge.

Worries are still persisting from the euro area, especially after the European Commission President Jose Barroso said the euro zone is facing a “truly systemic crisis.” The announcement reignited fears after the tensions have eased following the intervention by the ECB, which bought Italian and Spanish bonds, according to people familiar with trading who declined to be identified. Italian 10-year bond yield retreated below 7%, while their Spanish counterpart fell to 6.23%. Thus, the political changes in Italy and Greece did not manage to calm down markets. Now, expectations increased the SNB will strengthen its intervention to raise the franc cap against the euro to 1.25 instead of the current 1.20 on predicted devaluation in the euro amidst the ongoing tensions in the euro region.

On Thursday, at 10:00 GMT, the Swiss economy will release Credit Suisse Zew survey (expectations) for the month of Nov. For the US, eyes will be on a batch of US data including housing data with the release housing starts and building permits for Oct. at 13:30 GMT as it will provide evidence about the status of the housing market that triggered the 2008 crisis. Housing starts are predicted to retreat to 610,000 from 658,000 a month earlier, while building permits is set to soar to 600,000 from 594,000. At the same time the US, initial jobless claims for the week ending Nov. 11 and continuing claims for the week ended Nov. 4 will be available. Thereafter, particularly at 15:00 GMT, Philadelphia Fed will be out. The data is expected to affect the pair’s movements, yet the main focus remains on the latest developments from the 17 nations using the common currency.

Originally posted here