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Forex - USD/CHF almost unchanged near 5-month highs

Published 07/31/2014, 06:02 AM
Updated 07/31/2014, 06:02 AM

Investing.com - The U.S. dollar was almost unchanged against the Swiss franc on Thursday, hovering close to five-month highs as Wednesday's upbeat U.S. data continued to support the greenback.

USD/CHF hit 0.9094 during late European morning trade, the session high; the pair subsequently consolidated at 0.9091, inching up 0.04%.

The pair was likely to find support at 0.9037, the low of July 29 and resistance at 0.9107, Wednesday's high.

The dollar strengthened broadly on Wednesday after official data showed that U.S. gross domestic product expanded at an annual rate of 4.0% in the three months to June, outstripping forecasts of 3.0%.

In addition, the contraction in the first quarter was revised to 2.1% from a previously reported 2.9% contraction.

But the greenback's gains were held in check after the Federal Reserve's latest rate statement said that considerable slack still remains in the labor market, despite the recent improvement in jobs growth, and that rates will remain on hold for longer.

The central bank also said inflation is rising and was moving closer to its long-term target.

The Swissie was steady against the euro, with EUR/CHF dipping 0.02% to 1.2169.

Also Thursday, Eurostat reported that the annual rate of inflation in the euro area slowed to a five year low of 0.4% in July from 0.5% in June. Economists had expected an unchanged reading.

The weak data added to pressure on the European Central Bank to implement further stimulus measures to shore up growth and stave off the threat of deflation in the currency bloc.

At the same time, official data showed that the unemployment rate across the euro area fell to 11.5% in June from 11.6% in May. It was the lowest rate since September 2012.

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