- A combination of factors sent USD/CHF higher for a fifth day in a row on Wednesday.
- The risk appetite drive undermined the CHF haven and extended some support to the pair.
- The dollar’s underlying bullish trend provided additional momentum ahead of the FOMC meeting minutes.
The pair USD/CHF it gained some positive traction for the fifth day in a row on Wednesday and rose to a two-and-a-half-week high during the first half of the European session. The rally pushed spot prices back above 0.9700 and was fueled by a combination of factors.
The boost in risk appetite, represented by the strong rally in global stock markets, undermined safe-haven demand for the Swiss franc. This coupled with the prevailing bullish sentiment around the US dollar acted as a tailwind for the USD/CHF pair and remained supportive.
Indeed, the dollar hovered near a two-decade high and continued to be supported by expectations that the Federal Reserve would raise interest rates at a faster pace to combat persistent inflation. These bets were confirmed by statements last week by Fed Chairman Jerome Powell, who was very bullish.
Speaking at the ECB Forum in Sintra, Powell said the Fed remains focused on controlling inflation and the US economy is well positioned to handle a tighter policy. Therefore, the market’s focus will continue to be the publication of the Minutes of the last FOMC meeting.
Investors will be looking for further clues on the Fed’s tightening path. Next, the focus will shift to the US monthly employment report (NFP), due out on Friday. This will influence the short-term USD price dynamics and provide a further directional boost to the USD/CHF pair.
Technical levels
Source: Fx Street
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