- USD / CHF rose to its highest level in 12 days at 0.8919.
- The US dollar index fell below 90.50 after an initial rally.
- The new strain of coronavirus forces investors to remain cautious.
The pair USD/CHF It advanced to its highest level since Dec. 9 at 0.8919 on Monday, but struggled to maintain its bullish momentum during US trading hours. At time of writing, the pair was up 0.35% on the day at 0.8862.
The DXY rally loses steam
The strength of the broad-based USD fueled the USD / CHF rally during European trading hours. Strong selling pressure surrounding global stock indices and risk-sensitive assets helped the dollar attract investors early in the week.
Renewed concerns about the new strain of coronavirus causing lockdowns across the country and a lack of progress in trade talks between the UK and the EU triggered a new flight to safety and the US dollar index (DXY) advanced by above 91.00.
In the second half of the day, the DXY lost traction in the absence of major fundamental drivers. The only data from the US showed that the Chicago Fed National Activity Index in November fell to 0.27 from 1.01 in October, but this reading was largely ignored by market participants.
Nonetheless, the major US stock indices are down 0.5-1.1%, suggesting that safe-haven flows remain intact and that the USD could continue to outperform its rivals.
On Tuesday, the US Bureau of Economic Analysis will release Gross Domestic Product (GDP) data for the third quarter, which is expected to show the economy expanded 33.1% annually.
Technical levels
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