- USD/CHF falls to a one-month low on Monday amid the selling bias around the dollar.
- Diminishing odds of more aggressive rate hikes from the Fed continue to weigh on the dollar.
- A softer risk tone benefits the safe-haven CHF and contributes to the pair’s modest decline.
The pair USD/CHF continues its recent downward trend, observed since mid-June, and witnesses sales for the fifth day in a row on Monday. This also marks the seventh day of negative movement in the previous eight and drags the pair to a one-month low, with the bears now waiting for a sustained break below the psychological level of 0.9500.
The US dollar remains under pressure near its lowest level since July 5, which is proving to be a key factor putting some downward pressure on the USD/CHF pair. Despite the persistent rise in inflationary pressures, growing fears of a recession forced investors to reduce their expectations of a more aggressive tightening of monetary policy by the Fed. This, in turn, has caused US Treasury yields to fall sharply and continues to weigh on the dollar.
The USD/CHF pair is under further pressure from a weaker risk tone, which tends to benefit the safe-haven Swiss franc. Sentiment remains fragile amid concerns about an economic downturn. This is evident in the modest weakness in the stock markets. That said, a nice rebound in US Treasury yields prevents investors from taking aggressive bearish positions on the dollar and limits deeper losses for the pair, at least for now.
Market participants are now awaiting this week’s US macroeconomic releases for further directional momentum. The rather busy US economic docket begins with the release of the ISM Manufacturing PMI later in the American session today. However, market attention will remain focused on the monthly US jobs report, popularly known as the NFP, due out on Friday.
USD/CHF technical levels
Source: Fx Street
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