Thursday, 03 January 2013 14:39
ZURICH: The Swiss franc fell to a three-week low against the dollar on Thursday as the effect of the "fiscal cliff" deal was tempered by continued US lawmaker wrangling over further spending cuts and the US debt ceiling.
Risk appetite was on the back foot in early trading as investors bought US dollars and sold the euro and the franc.
In previous sessions the safe-haven dollar had come under pressure, with investors buying risk assets as US lawmakers moved towards a deal to avoid the automatic tax hikes and spending cuts that could have threatened the US economic recovery.
The Swiss franc has been trading in lockstep with the single currency since September 2011 when the Swiss National Bank slapped a 1.20 per euro cap on the swissie to stave off recession and deflation.
Alpari foreign exchange analyst Joshua Mahony said in a note that the current euro-dollar level provides a perfect double top formation over the past 12 days of trading.
"The existence of a double top is typically bearish and subsequently points to a potential move to the downside," Mahony said.
"This is further justified by the downward moving stochastic, yet given it is moving into oversold, this may yet be a temporary move."
The franc fell 0.4 percent against the dollar compared to Wednesday's New York close to trade at 0.9214 francs per dollar, according to EBS data.
The franc was steady against the euro at 1.2101 francs per euro.
Center>Copyright Reuters, 2013