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by ForexNewsNow Team on July 6th, 2010

Swissy trims gains vs dollar, retreating from 3-month high

NEW YORK (Forex News Now) – The Swiss franc trimmed gains versus the dollar on Tuesday, retreating from a 3-month high following disappointing data on consumer price inflation in Switzerland and the U.S. services sector.

In U.S. afternoon currency trading, USD/CHF traded at 1.0596, down 0.47 percent on the day, after rising from 1.0561, the pair’s lowest since April 16.

Official data showed earlier that consumer price inflation in Switzerland dropped faster than expected in June. The report came after the Swiss National Bank dropped a pledge to tackle excessive strength in the Swissy through currency interventions in order to combat deflation risks.

According to forex analysis, USD/CHF was likely to touch immediate support around the low of April 1, 1.0435, and encounter resistance around the high of April 21, 1.0724.

Also Tuesday, the Institute for Supply Management, an industry group, said earlier in the day that its non-manufacturing index, which tracks service-oriented firms, dropped to 53.8 in June from 55.4 in May.

Global forex analysts had expected a reading of 50, according to two major forex news outlets.

Meanwhile, the Swissy dropped against the euro: EUR/CHF traded at 1.3367, down 0.14 percent on the day.

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