COZfx: USD/CHF trading lows on US budget deal

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COZforex: The US dollar declined to 6 day lows against the Swiss franc on Thursday, as news of a last minute US budget deal to raise the debt ceiling, avoiding a sovereign default, supported market sentiment.

USD/CHF hit 0.9040 amid European morning trade, the pair's lowest since October 9; the pair subsequently consolidated at 0.9051, tumbling 0.91%. COZforex senior currency strategist Ian • Quigley said, USD/CHF is predicted to find support at 0.9088, and a drop through could take it to the next support line of 0.9053. Meanwhile, the pair is predicted to find its first resistance at 0.9167, and a rise through could take it to the next resistance line of 0.9211.

Market sentiment improved amid relief over the last minute deal to avert an unprecedented US sovereign debt default. The deal will fund the government until January 15 and raise the government borrowing limit until February 7. Both sides also agreed to talks over broad budget issues in an attempt to reach a longer-term deal by December 13.

The agreement came with just hours to spare before the deadline to raise the USD16.7 trillion debt ceiling. President Barack Obama signed the bill into law early on Thursday morning and pledged to begin reopening the government "immediately."

However, investors remained concerned over the economic impact of the government shutdown and the possibility of another debt crisis, as the temporary solution does not resolve the underlying budgetary issues dividing Republicans and Democrats.

The Swissie was higher against the euro with EUR/CHF shedding 0.28%, to hit 1.2327.

Later in the day, the US was to publish a report on initial jobless claims and the Philly Fed manufacturing index.

(COZ forex UK)