Swiss Franc Up Vs Euro As Debt Fears Persist |
ZURICH, Nov 29 (Reuters) - The Swiss franc rose against the euro on Monday as investor focus switched to euro zone debt concerns in Portugal and Spain, supporting the safe haven Swissie, after EU ministers endorsed a loan package for Ireland.
Markets will be anxious to gauge whether the 85 billion euro debt package aimed at helping Dublin cover bad bank debts and close an outsize budget deficit will prevent fears spilling over to other troubled euro zone economies.
"A lot depends on how the market reacts to the Irish decision. Will it be a relief or will they still be sceptical over Portugal and maybe Spain?" said Commerzbank foreign exchange analyst You-Na Park.
"It is positive that Ireland now has its bailout package and we have more details, but the volume was not as big as investors expected, so we have to see if this will satisfy the market."
Some analysts are particularly concerned about Spain, as they say the European Financial Stability Facility, a joint EU-IMF fund created in May, would have insufficient funds to support the country, the world's ninth-largest economy, if it needed a bailout.
The franc was higher against the euro compared to the New York close, trading at 1.3278 francs per euro at 0827 GMT after hitting its highest level since late September earlier in the session.
The franc was also higher against the dollar, pushing back above parity to 0.9996 francs per dollar.
Any further military posturing in the Korean peninsula is also expected to induce investors to draw in risk.
"More action from either side will push risk aversion higher, strengthening safe haven currencies, which means the franc and the dollar," Park said.
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