- USD/CHF recovered slightly from a new monthly low hit this Friday.
- The risk appetite drive undermined the CHF haven and acted as a tailwind for the pair.
- The rebound in US bond yields helped revive demand for dollars and remained supportive.
- Recession fears prevented the bulls from making aggressive bets and could limit the rallies.
The pair USD/CHF traded with a slight positive bias throughout the first North American session and was last seen hovering around the daily high around the 0.9740-0.9745 area.
After showing some resistance below 0.9700, the USD/CHF staged a modest rebound from a fresh monthly low hit earlier this Friday amid risk appetite momentum. Market sentiment got a boost after the People’s Bank of China (PBOC) cut its five-year prime rate by 15 basis points to offset the economic slowdown. The strong rally in equity markets highlighted this fact, undermining the safe-haven Swiss franc and acting as a tailwind for the pair.
Elsewhere, the US dollar received some support from the rebound in US Treasury yields and prospects for more aggressive policy tightening by the Federal Reserve. This was another factor that contributed to the intraday recovery of the USD/CHF pair of more than 50 points. However, concerns over weakening global economic growth dampened optimism and prevented bulls from making aggressive bets in the absence of market-relevant economic releases in the US.
Markets remain concerned that a more aggressive move by major central banks to curb inflation could challenge global economic growth. Additionally, the war between Russia and Ukraine and prolonged COVID-19 lockdowns in China have fueled recession fears. This could continue to fuel some safe-haven flows, so it is prudent to wait for strong follow-on buying before confirming that the USD/CHF pair has formed a short-term bottom and positioning for further gains.
Technical levels
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.
