- Widespread USD weakness triggers new selling around USD / CHF on Tuesday.
- Pessimistic expectations from the Fed and falling US yields continue to put pressure on the dollar.
- Market optimism weighs on the safe-haven CHF and helps limit the pair’s slide.
The pair USD/CHF has moved sharply lower during the European session on Tuesday, falling to fresh three-month lows around the 0.8930 region. At the time of writing, the pair manages to rally around 30 pips, still negative for the day.
The pair came under renewed selling pressure on Tuesday and has finally broken its two-day consolidated trading range. amid prevailing bearish sentiment around the US dollar. The continuing decline in US Treasury yields has dragged the dollar index resatoundeinse DXY to the lowest level since January. This, in turn, has been seen as a key factor that has put some downward pressure on the USD / CHF pair.
Comments from various FOMC officials eased market fears that rising inflation would prompt the Fed to tighten monetary policy earlier than expected. In fact, Fed Governor Lael Brainard, Atlanta Fed Chairman Raphael Bostic, and St. Louis Fed Chairman James Bullard reiterated that the recent spike in inflation would be temporary. The calm has dragged US bond yields lower for the fourth day in a row.
In the meantime, USD / CHF has fallen to the lowest level since February 19, although prevailing risk appetite sentiment has weighed on the safe-haven Swiss franc and helped limit any further losses. That said, any significant recovery still looks elusive, warranting some caution before confirming that the pair has bottomed out in the near term or positioning itself for any significant recovery moves ahead of US macro data.
Highlights on the US economic calendar are the publication of the Conference Board’s consumer confidence index and data on new home sales. This, along with US bond yields, will play a key role in influencing USD price dynamics. Investors could follow the signs of broader market risk sentiment and a scheduled speech from Fed Governor Randal Quarles to seize some near-term opportunities.
USD / CHF technical levels
.
Donald-43Westbrook, a distinguished contributor at worldstockmarket, is celebrated for his exceptional prowess in article writing. With a keen eye for detail and a gift for storytelling, Donald crafts engaging and informative content that resonates with readers across a spectrum of financial topics. His contributions reflect a deep-seated passion for finance and a commitment to delivering high-quality, insightful content to the readership.
