- Expectations of an eventual reduction movement by the Fed prop up the USD.
- The problems due to COVID-19 do little to benefit the safe-haven CHF or stop the pair’s upward momentum.
- Investors are now waiting for Thursday’s US data to get some significant trade boost.
A sudden spike in demand for the US dollar has pushed the USD / CHF pair to new daily lows, around the 0.9235-40 region during the first half of the European session.
The pair has captured some aggressive buying on Thursday and has built on the previous day’s bounce from weekly lows amid the emergence of some new purchases around the US dollar. Expectations of an imminent Fed announcement acted as a tailwind for the USD, which in turn was seen as a key factor that provided a good boost to the USD / CHF pair.
Despite signs of easing inflationary pressures in the United States, Investors still believe the Fed would begin reversing its massive pandemic-era stimulus later this year. This, coupled with a modest rally in US Treasury yields, further supported the dollar and lifted the USD / CHF pair again near the month-long highs touched earlier this week.
In the meantime, Concerns about the fast-spreading Delta variant and a global economic slowdown have done little to benefit the safe-haven Swiss franc, or hamper the intraday bullish move. Now it will be interesting to see if the USD / CHF pair is able to capitalize on the momentum or capture some selling at higher levels, as investors now await the macro data from the United States.
On Thursday’s economic calendar in the United States, the publication of monthly retail sales, the Philadelphia Fed manufacturing index and the initial weekly jobless claims stand out. This, along with US bond yields, could influence the dollar. Investors could continue to take cues from broader market risk sentiment to seize some short-term opportunities around USD / CHF.
USD / CHF technical levels
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