Forex - USD/CHF at record low as U.S. debt concerns weigh 26th July 2011

The broadly weaker U.S. dollar slumped to a record low against the Swiss franc on Tuesday, as a lack of progress in talks between U.S. President Barack Obama and congressional leaders to raise the U.S. debt ceiling bolstered demand for safe haven assets.

USD/CHF hit 0.8000 during European morning trade, the pair’s all-time low; the pair subsequently consolidated at 0.8022, shedding 0.45%.

The pair was likely to find support at 0.7800 and resistance at 0.8154, Monday’s high.

In an address from the White House on Monday, President Obama called on Republican and Democratic leaders to reach a fair compromise on raising the USD14.3 trillion debt ceiling, in order to avert a "reckless and irresponsible" national default ahead of the August 2 deadline.

Earlier Tuesday, a report showed that Switzerland’s UBS consumption indicator fell sharply in June, dropping to its lowest level this year.

The consumption indicator dropped by 0.4% year-on-year to 1.48 in June, led lower by a strong decline in new car registrations.

The report also warned that the strength of the Swiss franc may lead Swiss consumers to buy more products and services outside of Switzerland, leading to a further slowdown in consumer spending.

Meanwhile, the Swissie was slightly lower against the euro, with EUR/CHF easing up 0.18% to hit 1.1608.

Later in the day, the U.S. was to publish government data on new home sales, as well as data on consumer confidence and house price inflation.