USD/CHF Daily Fundamental Analysis for July 25, 2011

Both economies lack fundamentals which suggest that there would be calm trading on the pair that is expected to follow the general trend in market as it will not able to get direction from data.

The main sentiment in the markets is showing optimism after the announcement of a second bailout forGreeceas well as other measures that are expected to halt the spread of debt contagion to other debt-strapped nations in the region. Also, the report released last week showing that the White House will raise U.S. debt ceiling and reduce budget shortfall by nearly $3 trillion over the coming 10 years gave some hopes the debt problems in the U.S. would be resolved.

Thus, the dollar may continue its rebound against the franc as investors are estimated to leave the franc which is key safe haven amid mounting European debt crisis, especially as Johann Schneider-Ammann, the Swiss Economy Minister, said last week the franc’s appreciation against the euro is “alarming,” which shows that further appreciation in the franc is not welcomed by Swiss officials and may provoke an intervention.

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