Forex - EUR/CHF tumbles on Greece downgrade, U.S. debt fears

Investing.com – The euro tumbled against the Swiss franc on Monday, to trade within striking distance of the pair’s all-time low as concerns over a U.S. default weighed and after Moody's slashed Greece’s debt rating further into junk status.

EUR/CHF hit 1.1531 during European afternoon trade, the pair’s lowest since July 19; the pair subsequently consolidated at 1.1549, tumbling 1.79%.

The pair was likely to find support at 1.1401, the low of July 18 and the pair’s lowest since the inception of the single currency and resistance at 1.1801, the high of July 21.

Talks between President Obama and Republicans broke down late Friday, after the Senate rejected a USD3 trillion deficit reduction plan, adding to fears over a potential default ahead of August 2 deadline to raise the country’s USD14.3 trillion debt ceiling.

Both Moody’s Investors Service and Standard & Poor’s have placed their credit ratings on U.S. debt on review for a potential downgrade.

House Speaker John Boehner told Republican lawmakers on a conference call Sunday evening that no "grand deal" on raising the debt ceiling was possible with President Barack Obama.

Meanwhile, Moody's cut Greece’s sovereign debt rating by three notches to Ca earlier Monday, just one notch above default, after euro zone leaders last week agreed to another EUR109 billion in aid for the indebted nation, combined with EUR37 billion from the private sector.

Moody’s said the new aid package set a negative precedent for the creditors of other indebted nations.

The euro was also lower against the yen, with EUR/JPY dropping 0.30% to hit 112.41.

Meanwhile, White House Chief of Staff Bill Daley warned that there would be “a few stressful days" ahead for financial markets, in the event that the Congress fails to agree on a strategy by the end of Sunday.