* Swiss franc soars on safe-haven demand
* Dollar up slightly vs yen; data bolsters recovery hopes
* Australian dollar climbs to 28-year high
(Updates prices, details)
By Wanfeng Zhou
NEW YORK, Dec 30 (Reuters) - The Swiss franc hit record
highs against the euro and dollar on Thursday and looked set to
extend gains in the new year as fear a euro zone debt crisis
could further boost demand for a safe-haven currency.
The dollar also struggled against the yen, though it moved
off a seven-week low as stronger-than-expected U.S. data fed
optimism about the American economy and lifted bond yields.
Higher yields make dollar-denominated assets more attractive.
Trading volume was light ahead of the New Year's holiday,
and analysts warned against over-interpreting recent moves.
But many also said the Swiss franc's recent rise, while
partly tied to year-end position-squaring, could be a sign of
things to come in early 2011.
The euro fell as low as 1.2398 francs <EURCHF=EBS> and was
on track to post a record loss of about 16 percent this year.
The U.S. dollar is heading for a 2010 decline against the Swiss
franc of about 10 percent.
The moves highlight "the genuine strength of the Swiss
franc as opposed to simply weakness in the dollar or euro,"
said Camilla Sutton, chief currency strategist at Scotia
Capital in Toronto.
"We continue to be franc bulls, expecting that its status
as a European alternative to the euro, a strong sovereign
position and relatively solid fundamentals will continue to
(make) it an attractive home for investors," she said.
Swiss implied volatilities ticked higher, with the
one-month dollar/Swiss franc <CHF1MO=> trading at around 11.80
percent, a level last seen in mid-November.
Against the dollar, the euro hit a session peak of $1.3315
<EUR=EBS> after breaking above its 20-day moving average around
$1.3222. It was last at $1.3289, up 0.5 percent.
Worries that the euro zone debt crisis may spread to Spain
and Portugal have many analysts bracing for a renewal of euro
weakness in early 2011, though the currency's stubborn refusal
to break below the 200-day moving average -- now at $1.3086 --
has frustrated bearish investors.
STRONGER US DATA
The dollar earlier slipped as low as 81.28 yen <JPY=EBS>
-- its lowest in seven weeks -- edging closer to a 15-year low
of 80.21 yen hit in November. It was last down 0.2 percent at
81.55 yen.
Traders tied some of the yen's gains to Japanese exporters
bringing profits home before year-end, though lower Treasury
yields following strong demand at Wednesday's U.S. seven-year
auction also contributed.
The dollar drew a modest bid after data showed U.S. initial
jobless claims hit their lowest level in more than two years
last week, while another report showed Midwest factory activity
grew in December at its fastest pace since 1988.
[]
The National Association of Realtors also said pending home
sales rose for a second straight month. with the 3.5 percent
advance besting the market's forecast for a 2 percent rise.
"It all fits with theme that the U.S. economy is moving in
the right direction, and that is going to be supportive of the
dollar and higher bond yields in 2011," said Mark McCormick,
currency strategist at Brown Brothers Harriman in New York.
The Australian dollar hit a fresh 28-year high of $1.0198
<AUD=D4> against the U.S. dollar, though option barriers at
$1.0200 prevented further gains and it eased back to $1.0158.
(Additional reporting by Steven C. Johnson; Editing by Dan
Grebler)
