The Swiss franc rose against both the dollar and the euro on Tuesday, looking to touch the previous week's record peak against the European unit as traders capitalised on safe-haven plays in thin year-end markets. The Swiss franc, which investors regard as a safe haven, has gained some 15 percent against the euro this year on worries about sovereign debts in the eurozone and Switzerland's strong growth.
It hit an all-time record of 1.2435 on December 22 but has eased somewhat since. The franc rose 0.6 percent against the euro compared to the New York close, trading at 1.2567 per euro. The franc rose 0.9 percent against the dollar to 0.9507 per dollar. According to the UBS consumption indicator, also released on Tuesday, private consumption is expected to rise 1.7 percent next year, bolstered by strong immigration, low interest rates and declining unemployment. "Today the Swiss franc is still quite strong because it is highly demanded as a safe haven," Sarasin strategist Ursina Kubli said.
The euro rose sharply against the dollar on Tuesday, after stop-loss orders were triggered at key chart points. "The euro weakness is going to continue because the countries at the periphery are growing less strongly," she said. "The bounce back of the euro will be short-lived."
UBS forex strategists said they were bearish on euro-Swiss, focusing on 1.2439 ahead of 1.2283, with resistance at 1.2714 per euro. UBS also forecast a fall in dollar-Swiss, with a break through the support at 0.9463 potentially exposing 0.9202. Initial resistance was at 0.9734, they said.
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