- Recovery of the dollar that reaches prices above 1,0000 for the first time since June.
- Dollar rises on Fed hopes and geopolitical concerns.
- USD/CHF stands at 0.9600 at the end of the year – UBS.
The dollar extends its four-day rally on Monday, and has launched a first attempt to break above 1.0000 in the US session on Monday. The pair is up 0.7% on the daily chart, to maintain a strong four-day rally against the Swiss.
An aggressive Fed line and geopolitical fears drive demand for dollars
Last Friday’s Non-Farm Payrolls report has reaffirmed investors’ bets on another aggressive rate hike at the Fed’s scheduled meeting this week US bond yields rose sharply after the release of the report on employment in the US, giving a new boost to the dollar.
US non-farm payrolls increased by 263,000 in September, beating expectations for a 250,000 increase, while the unemployment level fell to a 50-year low of 3.5% from 3.7% in the previous month.
Furthermore, the escalation in the Ukraine war, with the launch of the biggest airstrike since the start of the war on Monday, has increased risk aversion at the start of the week, ultimately favoring the greenback as a haven.
USD/CHF will drop towards 0.96 by the end of the year – UBS
However, UBS currency analysts see the ongoing dollar recovery as a good selling opportunity: “Although Swiss inflation moderated both year-on-year and month-on-month in September, we believe the SNB remains on a tightening path and wants a stronger CHF to continue fighting inflation (…) Any recovery towards is a good opportunity to sell the dollar in favor of the franc, in our opinion, forecasting the pair to reach 0.96 by the end of the year and 0.92 in June of next year.
Technical levels to watch
Source: Fx Street
With 6 years of experience, I bring to the table captivating and informative writing in the world news category. My expertise covers a range of industries, including tourism, technology, forex and stocks. From brief social media posts to in-depth articles, I am dedicated to creating compelling content for various platforms.
