USD/CHF looks to close modestly higher above 0.9700
|- USD/CHF stages a 50-pip recovery during American session.
- USD gathers strength after Fed's Powell dismisses negative rates.
- US Dollar Index steadies above 100 following Tuesday's drop.
The selling pressure surrounding the greenback during the first half of the day dragged the USD/CHF pair to a daily low of 0.9665. Nevertheless, FOMC Chairman Powell's comments on the monetary policy outlook triggered a fresh USD-buying wave and helped the pair recovery its losses. As of writing, the pair was up 0.27% on the day at 0.9720.
DXY gains traction during American session
While delivering his remarks on the current state of the US economy, Powell acknowledged that additional policy measures may be needed to avoid lasting damage to the economy. However, the chairman noted that the Fed intends to continue to use the tools that it has already tried and made it clear that they were not looking at negative rates.
The US Dollar Index (DXY), which fell to a daily low of 99.58 during the European session, made a sharp U-turn and now looks to close the day above 100.
Meanwhile, the market sentiment turned sour on Powell's commentary and allowed the CHF to limit its losses against its rivals. Reflecting the risk-off environment, Wall Street's main indexes are losing between 1.5% and 2.3%.
On Thursday, the Producer Price Index data from Switzerland will be released at 0630 GMT. Later in the day, the US economic docket will feature the weekly Initial Jobless Claims data as well as the Import Price Index and the Export Price Index.
Technical levels to watch for
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