USD/CHF roils five-day uptrend to drop towards 0.9300 on covid fears, Swiss GDP eyed
|- USD/CHF consolidates weekly gains, drops the most in six days.
- Virus woes spread on concerns over South African variant, WHO calls for special meeting.
- Fears of Fed’s rate hike at the wrong time adds to the risk-off mood.
- Swiss Q3 GDP eyed for fresh impulse but risk catalysts are the key.
USD/CHF stays pressured around intraday low after snapping the five-day advances during early Asian session on Friday. That said, the quote registers the most daily losses in over a week while posting 0.9330 as a quote, down 0.27% on a day.
The risk barometer pair justifies the Swiss currency’s (CHF) safe-haven status on sour sentiment due to the coronavirus fears ahead of the key Swiss Q3 GDP data.
The covid-19 woes spread outside the initial fear-zone of Europe on concerns relating to the variant, with a formal name of B.1.1.529, which is linked to South Africa and is immune to the vaccines. For the same, the World Health Organization (WHO) has called for a special meeting on Friday and may announce it as the variant of concern.
Additionally weighing the risk appetite are the chatters that the Fed’s much-lauded monetary policy tightening will be at the wrong time.
Amid these plays, the US 10-year Treasury yields drop eight basis points (bps) to 1.565%, extending Wednesday’s pullback from the monthly peak. Additionally portraying the risk aversion are the downbeat prints of the S&P 500 Futures, -0.80% intraday, as well as the Asia-Pacific stocks.
While the virus updates are important for near-term USD/CHF moves, Q3 Swiss GDP will also direct the pair traders. Forecasts suggest the growth number will rise from 1.8% prior to 2.0% QoQ on a seasonally adjusted basis. However, the YoY print is likely easing from 7.7% to 3.2%.
Other than that, the US traders’ return from the Thanksgiving Day holiday and the yields are also important to watch for clear direction.
Technical analysis
A clear downside break of a 12-day-old ascending trend line directs USD/CHF bears to 10-DMA level surrounding the 0.9300 threshold.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.