Euro hits record low versus Swiss franc in London

The euro hit a record low against the Swiss franc on Monday, as worries over attempts to deal with the Greek debt crisis made investors shy away from the common currency and seek relative safety in the franc. Volumes were on the lower side with many centres in Europe closed for a holiday. The cost of insuring peripheral eurozone bonds against default hit a record high, while a general lack of appetite towards riskier assets dented euro sentiment.
The euro fell to as low as 1.2004 francs on trading platform EBS. Traders said stop-loss orders were triggered after it fell through 1.2050, and system-related selling pushed it towards 1.2000 francs in thin liquidity. They highlighted large option structures at 1.2000, with a break below expected to trigger more euro selling. Euro/Swiss last traded around 1.2025, down around 0.6 percent for the day.
The euro also skidded to a one-week low in Asia of $1.4285 before some central bank demand helped it pare losses. It was last trading with slight gains on the day at $1.4383. Resistance was at the 55-day moving average at $1.4398 and a concentration of former support levels around $1.4430/50, which includes previous intraday peaks in May and a 38.2 percent retracement of the May-to-June rise.
European policymakers appeared deadlocked on how private investors could be involved in some form of restructuring of Greek debt. The European Central Bank is opposed to German proposals for a bond swap, arguing that it would trigger market turmoil. Bundesbank head Jens Weidmann in comments released at the weekend said he was against extending the maturities of Greek bonds held by the ECB in any "soft" restructuring.
German and French banks were leaning towards contributing to a Greek rescue, even as it remained unclear how they could do so without triggering a default or credit default swap contracts. The rush towards safe-haven assets boosted the Swiss franc and kept the dollar pinned near record lows hit last week. The dollar was last down 0.7 percent at 0.8374. The New Zealand dollar tumbled after a series of powerful earthquakes shook Christchurch, four months after the city was badly damaged by a 6.3 magnitude quake. The kiwi dropped 1 percent to trade at $0.8125.