FOREX-Euro slides vs Swiss franc for a 6th day, lower eyed

* Euro at all-time low vs Swiss franc, more losses seen

* China will buy Portuguese debt – report

* U.S. Q3 growth revised higher, but below forecast
(Adds quotes, updates prices, changes byline)

By Julie Haviv

NEW YORK, Dec 22 (BestGrowthStock) – The euro slid to its lowest
level against the Swiss franc for a sixth straight day on
Wednesday, with losses expected to steepen in 2011 as the euro
zone debt crisis weighs.

The euro fell (Read more about the trembling euro. ) below 1.25 Swiss francs, down about 16
percent so far this year, as debt troubles in Portugal, Spain
and Greece, and fears of contagion enhanced the safe-haven
status of the Swiss currency.

Uncertainty surrounding these countries has hurt the euro
as investors seek safety. At the session low, the euro was
below its 200-day moving average, reaching $1.3095, a bearish

“If you look at what is going on with the euro it shows
there is negative sentiment due to the lack of resolve in the
euro zone,” Jessica Hoversen, currency strategist at MF Global
in Chicago.

“I do not see the major downturn trend of the euro being
threatened before end of year,” she said.

The euro (EURCHF=EBS: ) was last down 0.7 percent at 1.2471
Swiss francs. It hit as low as $1.2448 on trading platform EBS
after taking out option barriers at 1.2500, traders said.

The euro (EUR=EBS: ) slipped 0.06 percent against the dollar
to $1.3088, reversing gains sparked by a report that China was
ready to buy significant amounts of Portuguese sovereign debt.
It had earlier risen to a session peak of $1.3183, bouncing off
its near three-week trough of $1.3073 set on Tuesday.

Hoversen said the euro versus the Swiss franc will likely
test the 1.20 level, but sees that level as a bottom and it
should close above it next year.

“Growth in the U.S. should keep the dollar firm for the
time being, with the euro at risk of hitting $1.20 to $1.25 in
the second half of next year before reaching a bottom,” she

The options market signaled further downside for the pair
and speculative positioning data showed an increase in bets in
favor of the Swiss franc. Morgan Stanley said this week it
expects the euro to fall to 1.20 Swiss francs in 2011.

“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.

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.


Euro/Swiss franc risk reversals moved further in favor of
euro downside this week as spot rate repeatedly hit all-time

One-month 25-delta euro/Swiss (EURCHF1MRR=GFI: ) risk
reversals last traded at around 2.10, with a bias toward puts,
suggesting more investors are betting the euro will fall
against the Swiss franc than rise. In mid-December, one-month
risk reversals were around $1.90.

The latest IMM data from the Commodity Futures Trading
Commission showed speculators boosted long positions in the
Swiss franc in the week ending Dec. 14. The number likely
increased further this week given the rally in the franc.

Goldman Sachs said its implied IMM EUR/CHF positioning
score stands at -4.5, the same level as in August and
consistent with a relatively stretched short positioning that
has been exceeded only rarely in the past.

Against the yen, the euro fell (Read more about the trembling euro. ) 0.3 percent to 109.39
(EURJPY=: ). The dollar lost 0.2 percent to 83.59 yen (JPY=EBS: )
after data showed U.S. economic growth was a touch higher than
previously estimated in the third quarter, but below
expectations. See [ID:nN21260995]

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 Wanfeng Zhou in New York; Editing
by Diane Craft)

FOREX-Euro slides vs Swiss franc for a 6th day, lower eyed