Forex - USD/CHF rises to 2-week high after Fed minutes, Spanish auction
Investing.com
Published Apr 04, 2012 05:10AM ET
USD/CHF hit 0.9139 during European morning trade, the pair’s highest since March 22; the pair subsequently consolidated at 0.9142, gaining 0.49%.
The pair was likely to find support at 0.9076, the low of March 21 and resistance at 0.9178, the high of March 22.
The dollar found broad support after the minutes of the Fed’s March meeting showed that policymakers will refrain from launching a third round of quantitative easing unless the rate of growth falters or inflation drops below the central bank’s 2% targeted rate.
Meanwhile, market sentiment remained under pressure after a Spanish bond auction met with weak investor demand, adding to concerns that Spain will be the next euro zone country to require a bailout.
Madrid sold EUR1.1 billion worth of three-year bonds at an average yield of 2.89%, up from 2.44% at a previous auction. Spain’s treasury also sold EUR0.973 billion of government bonds maturing in 2016 at an average yield of 4.31%, up from 3.37%, and EUR0.489 billion of bonds maturing in 2020 at a yield of 5.33%, up from 5.15%.
Sentiment also weakened after official data showed that retail sales in the euro zone fell unexpectedly in February, ticking down 0.1% after a 1.1% rise the previous month.
A separate report showed that the bloc’s service sector contracted for the sixth time in seven months in March, increasing the likelihood that the economy has entered a technical recession.
Elsewhere, the Swissie was steady against the euro with EUR/CHF inching 0.03% higher, to hit 1.2044.
Later in the day, the U.S. was to produce industry data on non-farm employment change, as well as report by the Institute of Supply Management on service sector activity and government data on crude oil stockpiles.
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Written By: Investing.com
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