USD/CHF stays depressed around mid-0.9300s ahead of Swiss GDP

• USD/CHF remains pressured after reversing from the highest levels since early December the previous day.
• Risk-on mood, month-end consolidation joins mixed US data to favor sellers.
• Swiss Q4 GDP expected to ease on YoY but improve on seasonally adjusted QoQ basis.
• Second-tier US data, risk catalysts also important for fresh impulse.

USD/CHF portrays the pre-data anxiety while making rounds to 0.9350 during early Tuesday. Even so, the cautious optimism in the market, as well as the broad US Dollar weakness, allows the Swiss currency pair to consolidate the first monthly gain in four.

The trade-positive headline from the White House joined a retreat in the US Treasury bond yields to underpin the latest cautious optimism.

That said, the US offers an olive branch to China companies despite its political differences with the dragon nation, allowing the S&P 500 Futures to track Wall Street’s gains by the press time. “Despite fraying relations with Beijing, US President Joe Biden is expected to forego expansive new restrictions on American investment in China, denying a push by some hawks in his administration and Congress,” reported Politico late Monday.

It’s worth noting that the US Treasury bond yields remain lackluster while the S&P 500 Futures print mild gains by tracking Wall Street’s upbeat closing amid quiet hours of Tuesday’s trading.

On Monday, US Durable Goods Orders slumped -4.5% in January versus -4.0% expected and 5.1% prior. However, the Nondefense Capital Goods Orders ex Aircraft grew 0.8% versus 0.0% analysts’ expectations and -0.3% previous readings. On the same line, the US Pending Home Sales rallied 8.0% MoM versus 1.0% expected and 1.1% prior.

Even so, Federal Reserve Governor Philip Jefferson said on Monday that it is important to get back to 2% inflation to allow those sorts of sustained economic gains. Reuters also portrayed hawkish Fed concerns while saying, “Economic data this month reflected still tight jobs markets and inflation remaining sticky, leading Fed funds futures traders to bet on higher rates, which in the US are now seen peaking in September at 5.4%, up from 4.58% now.”

Moving on, Swirzerland’s fourth quarter (Q4) Gross Domestic Product (GDP) will be crucial for immediate direction. Forecasts suggest that the QoQ GDP is up 0.3% versus 0.2% prior, but the YoY figure hints at a contraction in economic activities by 1.2% versus the previous growth of 0.5%.

Apart from the Swiss GDP, the second-tier US data, namely Conference Board’s Consumer Confidence, Chicago Purchasing Managers’ Index and Richmond Fed Manufacturing Index for February, as well as the preliminary US trade numbers for January, will also be important for USD/CHF traders to watch for clear directions.

Technical analysis

USD/CHF pullback remains elusive unless the quote stays beyond a two-week-old ascending support line, around 0.9320 by the press time.