- The sustained selling of the USD put further downward pressure on the USD / CHF on Tuesday.
- A modest rally in US bond yields and a positive risk tone did little to provide support.
The pair USD/CHF it maintained its strongly offered tone during the middle of the European session, although it has managed to recover a few pips from the almost three-month lows set earlier this Tuesday. The pair was last seen trading around the 0.8980-85 region, losing 0.55% on the day.
Following the modest positive move the day before, the pair came under renewed selling pressure on Tuesday amid prevailing bearish sentiment around the US dollar. Investors now appear to be convinced that the Fed will keep interest rates low for a longer period, which, in turn, continued to act as a headwind for the dollar.
Market expectations were further cemented by Fed Vice Chairman Richard Clarida on Monday, saying that the US economy has not reached the benchmark of additional substantial progress necessary to begin reducing asset purchases. Added to this, Dallas Fed Chairman Robert Kaplan reiterated that he does not expect interest rates to rise until next year.
The Fed’s dovish expectations largely overshadowed a modest rally in U.S. Treasury yields, which, so far, have not provided any respite for USD bulls. Even a generally positive tone in financial markets, which tends to undermine demand for the safe-haven Swiss franc, also did not do much to support the USD / CHF pair.
Home starts in the US declined 9.5% on a monthly basis in April following March’s sharp rise of 19.8% (revised from 19.4%), data jointly released by the US Census Bureau showed Tuesday. The US and the US Department of Housing and Urban Development Further details from the release revealed that building permits, which increased 1.7% in March, increased 0.3% in the same period. Meanwhile, USD price dynamics will play a key role in influencing USD price dynamics and allow traders to seize some short-term opportunities.
Technical levels
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