THE dollar has been falling across the board, but against the Swiss franc it is now flirting with parity. The pair was seen at these levels in the first quarter of 2008, but the currency never managed to fall below SFr 0.9877, and a sustained break below parity would be moving towards uncharted territory.
The Swiss National Bank has been actively intervening in the euro-Swiss franc pair for some time and as the Swiss franc continues to strengthen against the greenback, the question of central bank intervention in Swiss franc-US dollar does start to come into play again. Many doubt how effective this could be, but it may be sufficient to at least slow any break below this important psychological barrier. IG Index are currently quoting SFr 1.0107-1.0117.
The greenback has also been flirting with parity against the Australian dollar and with many medium-term players still very long, the bullish tone in Aussie dollar-US dollar is expected to remain until at least the end of the year. Any dips in the pair as a result of pre-Christmas profit-taking is likely to see some eager buyers enter the markets to take advantage of the cheaper levels. Traders ought to be targeting US$0.9450 over the coming days. ETX Capital is offering a market price of US$0.9212.
The euro-USdollar continues to find strong selling resistance any time it comes near the key $1.5000 level, with nine attempts since the beginning of November all failing, resulting in healthy sell-offs. But it could only be a matter of time before it breaks to the upside. Spread betters could look to get on-board with buy orders in the $1.5050 area – a strong breakout could see it reach the top of its long term trend channel around $1.5350 pretty quickly. Spreadex has a euro-dollar spread of $1.4934-$1.4939.