USD/CHF remains poised to test 0.9200 on USD strength, PCE eyed
|- USD/CHF maintains its upside momentum in the Asian session.
- US dollar holds onto gains on Fed’s inflation and interest rate outlook.
- CHF surrenders gains as investors' risk appetite improves.
USD/CHF is accumulating minor gains in the early Asian session on Friday. After testing the high of 0.9240 in the previous week, the pair is making a consolidative move near the 0.9180 level.
At the time of writing, USD/CHF is trading at 0.9182, up 0.07% for the day.
Investors stay invested in the greenback as the shift in the US Fed’s stance on interest rates pertaining to the rise of inflation. However, the gains in the greenback were paused after the central bank signalled no steps in near future to roll out the stimulus although it acknowledges the risk of higher inflation.
The mixed economic data failed to boost the greenback’s gain. The Weekly Initial Jobless Claims fell to 411K, well above the COVID-19 pandemic. The reading suggests slower growth in the labor market. The Labor market is a property for the central bank now.
The US Durable Goods orders rose 2.3% in May, recovering from a downwardly revised 0.8% drop in April, while the GDP growth was unrevised at 6.4%.
Meanwhile, US President Joe Biden on Thursday announced that the White House has agreed to an infrastructure plan with a bipartisan group of senators. The infrastructure plan is to improve the nation’s roads, bridges, and broadband.
Additionally, the US large banks cleared the Fed’s stress test, as they now face pandemic-era restrictions on buying back and paying dividends. The market sentiment improved following the announcements, which added to the US dollar attractiveness.
On the other hand, the Swiss franc maintains its safe-haven asset status, however, gains are limited as risk appetite improves.
As for now, traders are waiting for the release of the US Personal Income, PCE Price Index, and Michigan Inflation Expectations for fresh trading impetus.
USD/CHF additional levels
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