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- A combination of factors dragged USD/CHF to a near one-month low on Tuesday.
- The risk-off environment underpinned the safe-haven CHF and put downward pressure.
- The general weakness of the dollar further contributed to the selling bias and the decline.
The pair USD/CHF fell to a near one-month low during the early American session and is now looking to extend the bearish path below 0.9600.
The pair continued its recent pullback from a two-year high around the 1.0065 area hit earlier this month and saw some follow-up selling on Tuesday. This was the second consecutive day of decline and also the fifth of the previous six and was sponsored by a combination of factors.
The worsening global economic outlook continued to weigh on investor sentiment, reflected in a new wave of risk aversion. This, in turn, boosted demand for the traditional haven Swiss franc and dragged the USD/CHF pair lower amid the onset of strong selling around the US dollar.
The flow of risk aversion was reinforced by a further leg down in US Treasury yields. Elsewhere, the common currency’s sharp rebound – bolstered by comments from ECB policymakers – dragged the dollar index to a new monthly low. This was another factor that contributed to the drop in the USD/CHF pair.
Turning to economic data, US PMIs indicated slowing growth in both the manufacturing and services sectors, and did little to give dollar bulls a break. On Tuesday, the US economic docket also includes New Home Sales and the Richmond Manufacturing Index, although attention remains on Fed Chairman Jerome Powell’s speech.
Technical levels
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Source: Fx Street
