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Forex - EUR/CHF remains lower after Trichet press conference

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Forexpros - The euro remained lower against the Swiss franc on Thursday, after European Central Bank President Jean-Claude Trichet said the bank will extend exiting liquidity measures for six months as the debt crisis in the single currency bloc deepens.

EUR/CHF hit 1.0983 during European afternoon trade, the daily low; the pair subsequently consolidated at 1.0988, shedding 0.40%.

The pair was likely to find support at 1.0792, Wednesday's low and the pair's lowest since the inception of the shared currency and resistance at 1.1203, Tuesday's high.

Trichet said the ECB will lend euro-area banks as much money as they need for six months and extend its existing liquidity measures through the end of the year, as pressure increases on policymakers to resume bond purchases.

The central bank kept its benchmark interest rate at 1.5% earlier in a widely anticipated decision. ECB rates are still "accommodative" and inflation risks "remain on the upside," Trichet said.

While acknowledging a "particularly high" level of uncertainty, Trichet said inflation expectations "must remain firmly anchored."

Concerns over the risk of sovereign debt contagion in the euro zone intensified earlier after Spain's Treasury auctioned EUR3.3 billion of bonds at higher interest rates than at an auction last month.

Following the auction, the yield on Spanish 10-year bonds neared 7%, the threshold that heralded the bailouts of Greece, Portugal and Ireland.

Meanwhile, the euro was sharply higher against the yen, with EUR/JPY jumping 2.05% to hit 112.62.

Earlier Thursday, Japanese authorities stepped into currency markets for the first time since March to curb the yen's gains, amid concerns that the currency's appreciation would hinder the largely export-based economy's recovery from a downturn sparked by the March 11 earthquake and tsunami.

In addition, the Bank of Japan announced additional monetary easing to support the Finance Ministry's intervention to weaken the yen.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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