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USD / CHF recovers the previous day’s decline and remains comfortably above 0.9050

Usd / Chf Recovers The Previous Day's Decline And Remains
  • A good recovery in USD demand helps USD / CHF gain traction on Thursday.
  • Risk-off sentiment benefits the safe-haven CHF and limits additional earnings.

The pair USD/CHF maintains its recovery movement during the European session on Thursday, extending the previous day’s bounce from the 0.9030 region. At the time of writing, the pair remains close to the daily highs around the 0.9075 level.

After an initial drop to the 0.9040 region, the pair has managed to regain some positive traction on Thursday and for now appears to have broken three consecutive days of losing streak. The US dollar has strengthened again amid waning optimism about a pre-election US stimulus package, which in turn has been seen as a key factor that has triggered a short hedging move around the USD / CHF pair.

House Speaker Nancy Pelosi has confirmed that she will continue talks with US Secretary of the Treasury Steven Mnuchin and has remained optimistic about reaching a deal, although she has acknowledged that the measures could not be approved before November 3. Additionally, investors also doubt the ability of the United States Congress to overcome strong opposition from Senate Republicans to a larger stimulus bill.

Meanwhile, the president of the United States, Donald Trump accused Democrats of being unwilling to pass an acceptable compromise on the stimulus. Slow progress on a possible new fiscal package in the US has affected global risk sentiment. This has been evident by a further downward movement in stock markets, which has benefited the safe haven Swiss franc and it has limited the strong gains of the USD / CHF pair.

In addition to developments around the US stimulus measures, investors will follow the signs of the final presidential debate between Trump and his Democratic rival Joe Biden on Thursday. In the meantime, the focus will be on the release of weekly initial jobless claims data, which together with broader market risk sentiment, could generate some short-term business opportunities.

Credits: Forex Street



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