- The risk appetite boost undermined the safe haven CHF and helped the USD / CHF gain traction.
- The USD’s pullback from multi-month highs limited any significant gains.
The pair USD/CHF it rallied around 35-40 pips from the early session lows and updated the daily highs near the 0.9175-80 region in the last hour, although it had no follow-up.
The pair quickly reversed an intraday slide to the 0.9140 region and was supported by the boost from risk appetite in the markets, which tends to undermine demand for the safe haven Swiss franc. That said, the current pullback in the US dollar from multi-month highs kept any significant gains for the USD / CHF in check.
Concerns that the rapidly spreading Delta variant of the coronavirus could derail the global economic recovery, forced investors to reassess the timing of the Fed’s downsizing. This, to a greater extent, offset a good recovery in the yields on US Treasuries and was seen as a key factor that acted as a headwind for the USD.
This, in turn, prevented investors from placing aggressive bullish bets around the USD / CHF pair and limited gains, at least for the time being. Investors also seemed reluctant ahead of Fed Chairman Jerome Powell’s speech at the Jackson Hole Symposium later this week, further justifying some caution for bull traders.
Meanwhile, Monday’s release of the US manufacturing and services PMI will be considered for some business boost. This, along with US bond yields, could influence USD price dynamics. Apart from this, the broader market risk sentiment could produce some short-term opportunities around USD / CHF.
Technical levels
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