Swiss franc soars in New York

The Swiss franc hit record highs against the euro and dollar on Thursday and looked set to extend gains in the new year as fear a eurozone debt crisis could further boost demand for a safe-haven currency. The dollar also struggled against the yen, though it moved off a seven-week low as stronger-than-expected US data fed optimism about the American economy and lifted bond yields.
Australian dollar climbs to 28-year high Higher yields make dollar-denominated assets more attractive. Trading volume was light ahead of the New Year's holiday, and analysts warned against over-interpreting recent moves. But many also said the Swiss franc's recent rise, while partly tied to year-end position-squaring, could be a sign of things to come in early 2011.
The euro fell as low as 1.2398 francs> and was on track to post a record loss of about 16 percent this year. The US dollar is heading for a 2010 decline against the Swiss franc of about 10 percent. The moves highlight "the genuine strength of the Swiss franc as opposed to simply weakness in the dollar or euro," said Camilla Sutton, chief currency strategist at Scotia Capital in Toronto.
Swiss implied volatilities ticked higher, with the one-month dollar/Swiss franc trading at around 11.80 percent, a level last seen in mid-November. Against the dollar, the euro hit a session peak of $1.3315 after breaking above its 20-day moving average around $1.3222. It was last at $1.3289, up 0.5 percent.
Worries that the eurozone debt crisis may spread to Spain and Portugal have many analysts bracing for a renewal of euro weakness in early 2011, though the currency's stubborn refusal to break below the 200-day moving average - now at $1.3086 - has frustrated bearish investors. The dollar earlier slipped as low as 81.28 yen - its lowest in seven weeks - edging closer to a 15-year low of 80.21 yen hit in November. It was last down 0.2 percent at 81.55 yen. The Australian dollar hit a fresh 28-year high of $1.0198 against the US dollar, though option barriers at $1.0200 prevented further gains and it eased back to $1.0158.