- USD/CHF falls for the second day in a row and hits one-week lows.
- Market with limited ranges awaiting the US inflation data on Wednesday.
The USD/CHF extended the decline to the 0.9515 zone reaching the lowest level in a week. After this it bounced back cutting losses and climbed to 0.9540. The dollar managed to recover ground on a rise in Treasury bond yields.
The dollar initially showed weakness on Tuesday, after the New York Fed’s monthly survey showed the outlook for inflation fell sharply in July. Anyway, the focus is on the retail inflation figure for July to be published on Wednesday. On Thursday the wholesale inflation will come out. This data follows the employment data on Friday, which beat expectations and boosted the dollar in the market, amid renewed speculation with a more aggressive monetary policy.
The dollar eased downward pressure on Tuesday as Treasury yields rebounded. The 10-year tranche went from 2.74% on Monday to 2.79% and the 30-year tranche returned above 3.00%.
The USD/CHF remains close to 0.9500 which is important support. A clear lower close could herald more losses ahead. While in the opposite direction of breaking clearly and with confirmation on 0.9640, the dollar would be strengthened.
Technical levels to watch
Source: Fx Street
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