Forex - USD/CHF steady close to 1-week high

Investing.com - The U.S. dollar ticked up and down between small gains and losses against the Swiss franc on Thursday, as diminished expectations for more U.S. monetary easing supported the dollar, but concerns over the outlook for the euro zone weighed on risk appetite.

USD/CHF hit 0.9058 during European morning trade, the pair’s highest since February 23; the pair subsequently consolidated at 0.9041, dipping 0.03%.

The pair was likely to find support at 0.8934, Wednesday’s low and resistance at 0.9113, the high of February 23.

In testimony to Congress on Wednesday, Federal Reserve Chairman Ben Bernanke dampened expectations for a third round of monetary easing after he acknowledged the recent improvement in the labor market and said that higher oil prices could push up inflation.

However, Bernanke also said the central bank was prepared to adjust the balance sheet “as appropriate” to promote the economic recovery.

But market sentiment remained fragile as concerns over the effectiveness of the European Central Bank's massive liquidity boosting operation on Wednesday weighed.

Concerns over the outlook for the euro zone were exacerbated after official data showed that the unemployment rate in the single currency bloc climbed to the highest level since the inception of the euro in January, while the annualized rate of inflation also increased.

In Switzerland, official data earlier showed that the economy expanded at an annualized rate of 1.3% in the in the final three months of 2011, above expectations for a 1.1% increase.

A separate report showed that manufacturing activity in Switzerland improved more-than-expected in February, but remained in contraction territory for the fifth consecutive month.

The Swissie was fractionally lower against the euro, with EUR/CHF inching up 0.02% to hit 1.2053.

Later Thursday, European Union leaders were to hold the first day of a two-day summit meeting in Brussels. Ahead of the meeting, euro zone finance misters were expected to hold talks to discuss whether Greece has fulfilled the required conditions to secure its second bailout.

Meanwhile, the U.S. was to produce government data on unemployment claims, while the Institute for Supply Management was to produce a report on manufacturing activity. In addition, Ben Bernanke was due to testify for a second day before Congress.