Swiss Franc Strengthens On Dagongs U.S. Downgrade The Swiss franc climbed against other major currencies in European deals on Thursday after Chinas rating agency Dagong lowered the U.S. credit rating and maintained negative outlook. The franc, perceived as safe-haven currency, tend to gain in times of financial turmoil and vice-versa. Dagong slashed U.S. credit rating to A- from A, saying deterioration in political system to solve the fiscal impasse. The government is still approaching the verge of default crisis, a situation that cannot be substantially alleviated in the foreseeable future, it added. The franc rose by 1.1 percent to an 8-day high of 0.9034 against the greenback from yesterdays close of 0.9133. The franc may face resistance around the 0.89 level. The U.S. lawmakers passed the agreement which will fund the government through January 15 and suspend the debt limit until February 7. The plan also calls for lawmakers to work toward a broader budget agreement by December 13 and includes stricter income verification for subsidies under Obamas Affordable Care Act. The franc appreciated to a 3-day high of 1.4513 against the pound but has moved off after the release of better-than-expected U.K. retail sales. The pair ended Wednesdays trading at 1.4561. The data from the Office for National Statistics said that the U.K. retail sales volume, including automotive fuel, rose more-than-expected to 0.6 percent on month in September. Sales, excluding automotive fuel, increased 0.7 percent on a monthly basis compared with expectations for a 0.3 percent growth. The franc climbed to a 6-day high of 1.2318 against the euro, up from Thursdays closing quote of 1.2358. The next possible upside target for the franc is seen around the 1.225 level. The franc jumped to 108.42 against the yen, its strongest level since October 11. If the franc gains further, it may eye upside target around the 109.00 area. Looking ahead, the U.S. building permits for September and weekly jobless claims for the week ended October 12 are expected in the New York session.
Posted on: Thu, 17 Oct 2013 10:36:43 +0000
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