ZURICH: TheSwiss franc soared to another record peak against the dollar on Tuesday as investors became increasingly doubtful about a breakthrough in U.S. debt talks.
Fiscal uncertainty in both the euro zone and the United States has fuelled demand for safe-haven assets, such as the franc, and this has pushed Switzerland's currency to one high after another against the euro and the dollar this year.
"Our near-term outlook for dollar/Swiss franc remains bearish and our one-month target of 0.81 was reached yesterday," analysts at Credit Suisse said in a note.
At 0715 GMT, the franc was 0.5 percent higher compared to the New York close, trading at 0.8016 per dollar, having earlier risen to an all-time high of 0.7997 per dollar on trading platform EBS.
Against the euro, the franc was 0.5 percent weaker at 1.1638 per euro, pulling away from the peak hit earlier this month.
"We remain bearish on euro/Swiss franc, backed by negative technical momentum rating. Our one-month target of 1.16 has been undershot. The key resistance level to stabilize the technical picture is at 1.18," the Credit Suisse analysts said.
But the analysts said they expect the franc to weaken to 1.30 per euro in 12 months due to the rich valuation of the Swissie, while they also expect the euro risk premium to fall.
The strong franc is worrying Swiss policy makers, politicians and businesses as its strength is hitting exporters, while Swiss consumers are likely to start going abroad more often for their shopping.
