FOREX-Euro at record low vs Swiss franc, more losses seen

* Euro hits all-time low versus Swiss franc

* China will buy Portuguese debt – report

* U.S. third-quarter growth revised up to 2.6 pct
(Adds comment, updates prices, changes byline, dateline,
previous LONDON)

By Wanfeng Zhou

NEW YORK, Dec 22 (BestGrowthStock) – The euro fell (Read more about the trembling euro. ) to a record low
against the Swiss franc on Wednesday, with losses seen
accelerating on concern the euro zone debt crisis will continue
well into 2011.

But the euro edged up versus the dollar, helped by a report
that China was ready to buy significant amounts of Portuguese
sovereign debt and after data showed a smaller-than-expected
upward revision to U.S. third-quarter economic growth.

The euro fell (Read more about the trembling euro. ) as low as 1.2493 Swiss francs on trading
platform EBS, down about 16 percent so far this year, as
deteriorating debt problems in peripheral euro zone economies
enhanced the safe-haven status of the Swiss currency.

“We view the surging Swiss franc heading into year end as
an ominous warning sign for further trouble ahead in the euro
zone in early 2011,” said Lee Hardman, currency economist at
the Bank of Tokyo-Mitsubishi UFJ in London.

“It appears that smart money investors are preemptively
bailing funds out of the euro zone with Switzerland providing a
safe port to ride out the euro zone sovereign debt storm that
appears to loom on the horizon,” Hardman said.

In early trading, the euro (EURCHF=EBS: ) was down 0.4
percent at 1.2509 Swiss francs, after taking out option
barriers at 1.2500 francs, traders said.

The euro was up 0.1 percent against the dollar at $1.3082
(EUR=: ), having hit a session high of $1.3183 and above its near
three-week trough of $1.3073 set on Tuesday.

The Jornal de Negocios daily newspaper reported China is
looking to buy between 4 billion euros ($5.26 billion) and 5
billion euros of Portuguese sovereign debt to help the country
ward off pressure in debt markets, though it gave no details of
its sources. [ID:nLDE6BL0MW]. China’s central bank declined to
comment on the report.

“This is a small positive for the euro,” said Valentin
Marinov, currency strategist at CitiFX.

“The net supply in the first quarter is projected to reach
6 billion euros. If that is confirmed and China is willing to
buy 4-5 billion euros it will reduce some of the funding
pressures on Portugal.”

News that the ECB had allocated 149.5 billion euros in its
three-month tender dented sentiment slightly, as it showed a
greater-than-expected reliance by European banks on cheap
funding. [ID:nFAE005856]

With liquidity drying up ahead of the Christmas holiday,
Marinov expected the euro to underperform against riskier
currencies like the Australian dollar and the Scandinavian
currencies.

Against the yen, the euro was fell 0.3 percent to 109.41
(EURJPY=: ). The dollar also declined 0.3 percent to 83.49 yen
(JPY=EBS: ).

The dollar extended declines after data showed U.S.
economic growth was a touch higher than previously estimated in
the third quarter, but below expectations. See [ID:nN21260995]

“The data suggest that the economy enters the fourth
quarter on a slightly softer footing than initially expected,”
said Joe Manimbo, currency trader at Travelex Global Business
Payments in Washington. “But I think the number at this point
is fairly stale, so it may not have a dramatic impact on the
U.S. currency today.”

In the near term dealers expect range-bound trade, with
one-month implied volatility on dollar/yen falling below 9.5
percent (JPY1MO=: ), the lowest since late 2007.
(Additional reporting by Anirban Nag in London; Editing by
Padraic Cassidy)

FOREX-Euro at record low vs Swiss franc, more losses seen