The euro dropped to a record low against the Swiss franc for the sixth straight day on Wednesday, with losses accelerating on concern the eurozone debt crisis will continue well into 2011. The euro fell below 1.25 Swiss francs, down about 16 percent so far this year, as deteriorating debt troubles in peripheral economies and fears of contagion enhanced the safe-haven status of the Swiss currency.
The options market signalled further downside for the pair and speculative positioning data showed an increase in bets in favour of the franc. Morgan Stanley said this week it expects the euro to fall to 1.20 Swiss francs in 2011. The euro was last down 0.8 percent at 1.2448 Swiss francs. It hit as low as $1.2448 on trading platform EBS after taking out option barriers at 1.2500, traders said. The euro slipped 0.1 percent against the dollar to $1.3088, reversing gains sparked by a report that China was ready to buy significant amounts of Portuguese sovereign debt. It had earlier risen to a session peak of $1.3183, bouncing off its near three-week trough of $1.3073 set on Tuesday. Euro/Swiss franc risk reversals moved further in favour of a euro downside this week as spot rates repeatedly hit all-time lows.
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