USD/CHF falls as Greek exit fears calm

The US dollar lost ground on the Swiss franc yesterday, as concerns over Greece departing the eurozone calmed after an opinion poll from the Mediterranean country showed the pro-bailout party had more support ahead of June’s elections.

USD/CHF dropped to 0.9529 during morning trade in Europe, the lowest the pair has been since 23 May; the pair later consolidated at 0.9554, losing 0.44 per cent. The pair was expected to find support at the 23 May low of 0.9463 and resistance at the session high of 0.9570.

Investor sentiment strengthened following the news that an opinion poll in Greece showed that the New Democracy conservative party could be able to put a government in place after the elections on 17 June. An inconclusive election earlier in May sparked widespread concerns that the country may be driven out of the eurozone.

However, the greenback’s losses were limited as uncertainty about the elections’ outcome continued, while fears over Spain’s banking sector’s health and the country’s growing debts also weighed. The government of Spain announced that it would recapitalise one of the largest commercial lenders in Spain, sparking fresh worries that the mounting cost of bank rescues may lead to Madrid requiring an international bailout.