Euro stays at record low versus Swiss franc

The euro hit a record low versus the Swiss franc on Thursday on mounting doubts whether Greece will receive its next round of aid from the IMF, and the worries are likely to keep the single currency under pressure. Comments by Jean-Claude Juncker, president of the Eurogroup finance ministers, raised concerns that Greece may not get the next 12 billion euros in aid from the International Monetary Fund that is needed to cover immediate funding needs.
Heightened anxiety over Europe's sovereign debt crisis has driven the five-day slide in the euro versus the safe-haven Swissie. "The currency pair's performance is a reflection of the extreme nervousness existing in the market in relation to the sovereign debt crisis," said Kathy Lien, director of currency research at GFT Forex in New York. "There has been a lot of back and forth between the EU and the ECB on IMF aid to Greece, and that does not help the euro at all."
The euro fell as low as 1.22045 Swiss francs on electronic trading platform EBS and last traded down 0.5 percent on the day at 1.2234 francs. It also hit a 2-1/2-month low against sterling. Inspectors from the European Union, the European Central Bank and the IMF must assess whether Greece has made sufficient progress to receive the next round of aid under the country's 110 billion euro international bailout, though there is not specific date set for a decision. Government officials have said that the next instalment must be disbursed by July 15.
Against the dollar, the euro rose 0.3 percent to $1.4128. It earlier rose to $1.42069 on EBS after an article in the Financial Times quoted the chief of the European Financial Stability Facility as saying China was "clearly interested" in buying bonds for the Portugal bailout to be issued in mid-June.
The euro's support lies around the psychologically important level of $1.4000, traders said, which also marks the 200-week moving average. The 100-day moving average is at around $1.3996. If the euro makes a sustained break below $1.4000, then $1.3770, a 38.2 percent Fibonacci retracement of the euro's rise from June 2010 to May 2011, may be a key support, traders said. Against the yen, the US dollar on Thursday fell 0.8 percent to 81.30 yen after hitting a session low of 81.15 on EBS, hurt by disappointing US economic data.
The dollar hit a low of 79.56 yen earlier this month, but over the past week gains have been capped by the 100-day simple moving average at 82.25. That level is a key resistance point created not only by the moving average, but also the second standard deviation Bollinger band and the 38.2 percent Fibonacci retracement of the March to April rally.