WSJ:WORLD FOREX: Swiss Franc Soars As Caution Prevails
-- Swiss franc rises to three-week high against euro, dollar as sentiment sours
-- Fresh worries about Greece's access to bailout funds unnerve currency traders
-- Euro falls close to $1.42 but gets some welcome respite
-- U.S. August non-farm payrolls at 1230 GMT eyed.
By Jessica Mead
Of DOW JONES NEWSWIRES
LONDON (Dow Jones)--The Swiss franc was the clear gainer in a choppy European session Friday as fresh worries about Greece's access to bailout funds and caution ahead of key U.S. jobs data boosted demand for traditional safe-haven currencies.
The steady drip of negative euro-zone news continued Friday as talks between Greece and a visiting troika of international creditors were suspended amid a dispute over the country's ability to meet its deficit targets.
That caused nervous traders to pile into the safe-haven Swiss franc, which surged 2% against both the euro and the dollar to trade at its strongest levels since Aug. 12. The euro fell to as low as CHF1.1060 against the franc, while the dollar sank to CHF0.7760.
"[The negative tone] is a combination of factors that have been building for the last few days," said Sebastien Galy, senior currency strategist at Societe Generale in London. He added that traders are holding back from placing any risky bets in this environment and ahead of U.S. non-farm payrolls at 1230 GMT.
Jitters about Greece, combined with broader political uncertainty and concerns about euro-zone growth, put the euro under pressure at the start of the session with the single currency coming within a whisker of breaking the key $1.42 level against the dollar.
But the euro got some welcome respite from selling pressure after the Greek Finance Minister Evangelos Venizelos denied that talks had broken down and said the suspension of the talks was agreed to with the troika. That, combined with good demand for euros just above $1.42, helped the single currency retrace much of the early session's losses against the dollar.
After the sharp moves seen early in the session, traders were unwilling to drive currencies one way or the other ahead of the closely watched U.S. nonfarm payroll figures. Economists have penciled in 80,000 new jobs for August and a higher figure could be seen as reducing the chances of further stimulus from the Federal Reserve.
"These steps would be taken if the American central bankers were to get worried about a slide back into recession. Every data publication that moves us further away from this scenario is therefore good news. This applies in particular for labor market data," said Ulrich Leuchtmann, currency strategist at Commerzbank.
At 1041 GMT, the euro was trading at $1.4248 against the dollar, compared with $1.4263 late Thursday in New York, according to trading system EBS. The dollar was at Y76.77 against the yen, compared with Y76.91, while the euro was at Y109.39, compared with Y109.71. Meanwhile, the pound was trading at $1.6210 against the dollar, compared with $1.6185 late Thursday in New York.
The ICE Dollar Index, which tracks the greenback against a basket of currencies, was at 74.501 compared with 74.544 late Thursday in New York.
A summary of key levels for chart-watching technical strategists is below:
Forex spot: EUR/USD USD/JPY GBP/USD USD/CHF
Spot 1033 GMT 1.4248 76.78 1.6207 0.7809
3 Day Trend Bearish Bullish Bearish Bearish
Weekly Trend Bearish Bearish Range Bullish
200 day ma 1.4085 81.00 1.6133 0.8781
3rd Resistance 1.4385 77.25 1.6412 0.8000
2nd Resistance 1.4315 77.18 1.6334 0.7926
1st Resistance 1.4288 76.97 1.6260 0.7872
Pivot* 1.4291 76.92 1.6192 0.7988
1st Support 1.4200 76.73 1.6176 0.7760
2nd Support 1.4103 76.42 1.6133 0.7701
3rd Support 1.4055 76.25 1.6114 0.7653
Forex spot: EUR/CHF
Spot 1033 GMT 1.1125
3 Day Trend Bearish
Weekly Trend Bullish
200 day ma 1.2336
3rd Resistance 1.1465
2nd Resistance 1.1377
1st Resistance 1.1215
Pivot* 1.1426
1st Support 1.1060
2nd Support 1.1025
3rd Support 1.0925
