Investing.com - The broadly weaker euro slumped to a seven-month low against the Swiss franc on Thursday, as the single currency came under broad selling pressure amid a combination of fears over high Spanish borrowing costs and concerns that the bloc is slipping into a recession.
EUR/CHF hit 1.1997 during European morning trade, the pair’s lowest since September 6; the pair subsequently consolidated at 1.2020, shedding 0.13%.
The pair was likely to find support at 1.1894, the high of August 30 and resistance at 1.2039, the session high.
On September 6 the Swiss National Bank set a minimum exchange rate floor of 1.20 per euro, amid concerns over the impact of the strong franc on the country’s economy and the risk of deflation.
But the euro came under pressure as concerns over Spain’s fiscal health mounted, as the country’s borrowing costs continued to rise following Wednesday’s poorly received bond auction.
The yield on the country’s 10-year bond climbed to 5.71% earlier, the highest level since mid-December.
Elsewhere, concerns over the outlook for growth weighed after European Central Bank President Mario Draghi warned Wednesday that "downside risks to the economic outlook prevail" after the central bank kept its benchmark interest rate unchanged at a record low of 1%.
Earlier Thursday, official data showed that German industrial production dropped 1.3% in February, more than expectations for a 0.5% drop and renewing concerns over the outlook for the bloc’s largest economy.
Market moves were also exacerbated by thin trade volumes in quiet pre-Easter trade.
The euro was also lower against the U.S. dollar and the pound, with EUR/USD shedding 0.62% to hit 1.3058 and EUR/GBP sliding 0.18% to hit 0.8256. The euro posted steep losses against the yen, with EUR/JPY tumbling 1.15% to hit 107.06.
In Switzerland, official data earlier showed that consumer price inflation rose more-than-expected in March, ticking up 0.6% after a 0.3% rise the previous month.
Analysts had expected consumer price inflation to rise 0.4% in March.
The data came after the Swiss National Bank said in a report that foreign currency reserves rose to CHF237.5 billion in March from CHF227.2 billion the previous month.
EUR/CHF hit 1.1997 during European morning trade, the pair’s lowest since September 6; the pair subsequently consolidated at 1.2020, shedding 0.13%.
The pair was likely to find support at 1.1894, the high of August 30 and resistance at 1.2039, the session high.
On September 6 the Swiss National Bank set a minimum exchange rate floor of 1.20 per euro, amid concerns over the impact of the strong franc on the country’s economy and the risk of deflation.
But the euro came under pressure as concerns over Spain’s fiscal health mounted, as the country’s borrowing costs continued to rise following Wednesday’s poorly received bond auction.
The yield on the country’s 10-year bond climbed to 5.71% earlier, the highest level since mid-December.
Elsewhere, concerns over the outlook for growth weighed after European Central Bank President Mario Draghi warned Wednesday that "downside risks to the economic outlook prevail" after the central bank kept its benchmark interest rate unchanged at a record low of 1%.
Earlier Thursday, official data showed that German industrial production dropped 1.3% in February, more than expectations for a 0.5% drop and renewing concerns over the outlook for the bloc’s largest economy.
Market moves were also exacerbated by thin trade volumes in quiet pre-Easter trade.
The euro was also lower against the U.S. dollar and the pound, with EUR/USD shedding 0.62% to hit 1.3058 and EUR/GBP sliding 0.18% to hit 0.8256. The euro posted steep losses against the yen, with EUR/JPY tumbling 1.15% to hit 107.06.
In Switzerland, official data earlier showed that consumer price inflation rose more-than-expected in March, ticking up 0.6% after a 0.3% rise the previous month.
Analysts had expected consumer price inflation to rise 0.4% in March.
The data came after the Swiss National Bank said in a report that foreign currency reserves rose to CHF237.5 billion in March from CHF227.2 billion the previous month.