Forex - USD/CHF edges higher in cautious trade

The U.S. dollar edged higher against the Swiss franc on Wednesday, as markets awaited the release of U.S. data later in the day, while downbeat Chinese manufacturing data weighed on demand for riskier assets. 

USD/CHF hit 0.9374 during European morning trade, the session high; the pair subsequently consolidated at 0.9357, edging up 0.10%. 

The pair was likely to find support at 0.9312, the low of June 24 and resistance at 0.9408, The high of July 22. 

Demand for the greenback remained supported as weaker U.S. data recently dampened expectations that the Federal Reserve will scale back its easing program later this year. 

Last week Fed Chairman Ben Bernanke said the bank could start tapering bond buying by the end of the year if the economy continues to improve, but added that there was no “preset course.” 

Earlier Wednesday, the preliminary reading of China’s HSBC manufacturing purchasing managers’ index fell to an 11-month low of 47.7 in July, from a final reading of 48.2 last month. Analysts had expected the index to rise to 48.6. 

The Swissie was lower against the euro with EUR/CHF adding 0.20%, to hit 1.2387. 

Also Wednesday, Markit's euro zone composite PMI output index rose to 50.4 from 48.7 in June on the back of stronger data from Germany and France, fuelling optimism that the euro zone economy could emerge from a recession in the third quarter.

Germany’s manufacturing PMI rose to 50.3 from June's reading of 48.6, and the service sector PMI jumped to 52.5, from 50.4.

The French manufacturing PMI ticked up to a 17-month high of 49.8 from 48.4 in June, while France’s services PMI improved to 48.2 from 47.2 last month.

Later in the day, the U.S. was to produce official data on new home sales.