- USD/CHF fell to a one-month low on Friday amid prevailing dollar selling bias.
- Indications that the Fed could pause the cycle of rate hikes later this year weighed on the dollar.
- The boost in risk appetite undermined the safe-haven CHF and helped limit deeper losses.
The pair USD/CHF remained on the defensive in the North American session and traded around the 0.9570 area, marking a new one-month low.
The FOMC’s May 3-4 Meeting Minutes, released on Wednesday, suggest the Federal Reserve may pause the rate-hike cycle after two hikes of 50 basis points each in June and July, in amid worsening economic prospects. Speculations were reinforced by the recent drop in US Treasury yields to a multi-week low, which, in turn, weighed on the US dollar and put downward pressure on the US dollar. USD/CHF pair.
However, the boost in risk appetite – reflected in a generally positive tone in equity markets – undermined the safe-haven Swiss franc and prevented traders from making aggressive bearish bets on the USD/CHF pair. Apart from this, a modest rebound in the dollar from a new monthly low helped limit any further losses, at least for now, although any significant recovery still looks elusive.
Traders will follow signs of broader market risk sentiment to take advantage of short-term opportunities on the final day of the week.
Technical levels
Source: Fx Street
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