ET:Swiss franc down vs dollar on broad greenback rally
ZURICH: The Swiss franc fell to its lowest level in almost a month against the dollar on Monday on a broad greenback rally fuelled by renewed concern over aid for Greece and other indebted euro zone countries.
The franc slipped against the dollar to 0.8932 per dollar at 0650 GMT. The dollar has steadily gained against the franc since it hit a record low of around 0.8554 francs on May 4.
"Gaining further ground, the dollar-franc broke through the key resistance of 0.8893 on Friday stopping just short of the next important resistance at 0.8947," said UBS economist Reto Huenerwadel in a research note.
But Credit Suisse analyst Marcus Hettinger said he remained bearish on the dollar against the franc.
"The technicals do not yet indicate signs of bottoming. The lack of interest rate support as the Fed stays dovish is also weighing on USD/CHF, notwithstanding the rich valuation of the franc," he said in a note.
Hettinger said speeches by Swiss National Bank Vice Chairman Thomas Jordan and board member Jean-Pierre Danthine could provide more clues ahead of the central bank's next monetary policy meeting on June 16.
"Current low inflation rates and still tight monetary conditions are likely to keep the Swiss National Bank (SNB) on hold on rates unless the franc weakens," he said.
Concerns about the euro zone debt crisis have put the single currency under pressure again in recent weeks, with uncertainty stoked by the arrest of IMF chief Dominique Strauss-Kahn over the weekend.
The franc was slightly weaker against the euro compared to the New York close, trading at 1.2608 per euro.
"The foreign exchange market's unease about the political discussion of European fiscal policies failed to send the euro-franc decidedly lower so far," said Huenerwadel.
Strauss-Kahn had been due to join euro zone finance ministers on Monday to discuss the bloc's debt crisis and how to handle Greece, which is struggling to meet the terms of a 110 billion euro European Union/IMF bailout last year.
Commerzbank technical analyst Karen Jones said she expected the euro to attempt to stabilise against the franc above its record low around 1.24:
"EUR/CHF last week sold off to the base of its short term down channel and is attempting stabilise very near term. Rallies are likely to find it tough to regain 1.2730 and while capped by the 1.2778 channel the market will remain under pressure."
