CHF benefited as the environment for risk improved following the mooted U.S. government plan on toxic debt. EUR-CHF rallied to 1.5970 as leveraged accounts and speculative names unwound recent long positions built up earlier in the week. USD/CHF also surged higher on a broad based dollar relief rally, to print 1.1278 highs. The outlook should remain fragile, with the market still vulnerable to further banking sector problems, while there is speculation that the idea of a "RTC style" bail out may have difficulty being passed in U.S. Congress amid concerns over more tax payers money being used. In this environment, any uncertainty is likely to temper speculative interest, which should limit any further CHF selling until fresh details emerge. Elsewhere, the Swiss Bource SWX has followed other bourses in banning naked short selling, while SNB's Roth has reiterated his belief that Swiss banks remain strong.
