USD/CHF: Little support toward the 0.8500 area – MUFG
|Analysts at MUFG Bank, continue to see the USD/CHF pair with a bearish perspective with no much support until the 0.8500 area. They consider Biden’s victory supports the outlook for a weaker US dollar.
Key Quotes:
“Over the past week the CHF has outperformed alongside the EUR as broad-based USD weakness has accelerated. USD/CHF has broken below key support at the 0.9000-level, and there now little in the way of support until 0.8500-level. It creates scope for further CHF gains in the near-term.”
“We continue believe that the election victory for Joe Biden supports our outlook for further USD weakness. We still expect the Fed to step up monetary easing to support the economic recovery following the weaker payrolls report. At the same time, it should increase pressure on Congress to reach a bipartisan deal on providing more fiscal stimulus.”
“We believe it is premature to see a sustainable reversal lower for currency debasement trades especially if inflation picks up while loose monetary policy remains in place. The CHF has been one of the main beneficiaries of the currency debasement trade alongside the price of gold.”
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