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Forex - USD/CHF tests record low amid global growth fears

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Forexpros - The U.S. dollar was hovering close to a record low against the Swiss franc on Tuesday, as fears over a slowdown in global economic growth and renewed concerns over the sovereign debt crisis in the euro zone supported safe haven demand.

USD/CHF hit 0.7760 during European morning trade, the daily low; the pair subsequently consolidated at 0.7802, shedding 0.41%.

The pair was likely to find short-term support at 0.7728, Monday's low and the pair's all-time low and resistance at 0.7952, Monday's high.

The outlook for global economic growth remained clouded after data on Monday showed that the U.S. Institute for Supply Management's Manufacturing Index fell to its lowest level in two years in July.

Meanwhile, worries about debt crisis in the euro zone spreading to core economies despite the recent bailout deal for Greece saw Italian and Spanish bond yields advance to 14-year highs.

Elsewhere, investors also remained wary that a deal to raise the U.S. debt ceiling would not be sufficient to prevent ratings agencies from downgrading the U.S. sovereign debt rating.

On Monday, the House of Representatives approved legislation to raise the U.S. debt ceiling by at least USD2.1 trillion and cut federal spending by as much as USD2.4 trillion. The measure was to go to the Senate for a final vote later in the day.

The Swissie was also trading close to a record high against the euro, with EUR/CHF tumbling 1.05% to hit 1.1048.

Also Tuesday, official data showed that Swiss retail sales, adjusted for inflation, rose 7.4% in June from a year earlier, after falling a revised 3.9% in the previous month. Analysts' had forecast that retail sales would rise by 1.6%.

A separate report showed that Swiss manufacturing activity rose unexpectedly in June.

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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.


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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