Forex - Dollar slumps against Swiss franc
Investing.com
Published Mar 13, 2014 06:56AM ET
Dollar slumps to 2-1/2 year lows against Swiss franc
Investing.com - The dollar slumped to two-and-a-half year lows against the Swiss franc on Thursday as concerns over slowing growth in China and the standoff between Russia and Ukraine continued to underpin safe haven demand.
USD/CHF was down 0.37% to trade at 0.8705, the weakest level since October 31 2011.
The pair was likely to find support at 0.8650 and resistance at 0.8748, the session high.
Market sentiment was hit after weaker-than-expected data from China pointed to a slowdown in the world’s second-largest economy at the start of the year.
Chinese industrial production rose 8.6% on a year-over-year basis in the first two months of 2014, according to data released on Thursday, missing market expectations for an increase of 9.5%.
Retail sales figures also undershot expectations, expanding 11.8% from the same period a year earlier.
China releases economic data for the first two months of the year together, to even out distortions related to the Lunar New Year holiday.
The data comes just days after China released a report showing that exports fell sharply in February. The weak data has fuelled expectations that China’s central bank could relax monetary policy to help shore up growth.
Meanwhile, investors remained wary as tensions between Russia and the West escalated ahead of Sunday's referendum in Ukraine’s Crimea region, now controlled by pro-Russian forces, on whether citizens want to join Russia.
The euro was little changed against the Swiss franc, with EUR/CHF trading at 1.2150, after falling to a more than one week low of 1.2138 earlier.
Investors were reluctant to test the 1.20 per euro minimum exchange rate floor imposed by the Swiss National Bank in September 2011.
The SNB put the exchange rate cap in place after the franc almost reached parity with the euro, amid concerns over the impact of a strong franc on the Swiss economy, and in particular on exports.
Elsewhere, the euro was trading at two-and-a-half year highs against the dollar, with EUR/USD up 0.33% to 1.3950.
The common currency continued to gain momentum following last week’s decision by the European Central Bank to refrain from implementing policy measures to shore up growth in the euro area, despite forecasting low inflation for some years to come.
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Written By: Investing.com
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