USD/CHF clings to small gains above 0.9600 ahead Swiss GDP data
- USD/CHF rebounds above 0.9600 after dropping to monthly lows.
- Pair remains indecisive as USD and CHF both struggle to find demand.
- Swiss economy is expected to contract by 2.2% in first quarter.
The USD/CHF pair dropped to its lowest level since the first day of May at 0.9574 on Tuesday but recovered its losses in the second half of the day. As of writing, the pair was up 0.15% on the day at 0.9620.
Earlier in the day, the broad-based selling pressure surrounding the greenback caused the pair to push lower. However, the upbeat market mood, which was the primary cause behind the USD weakness, also weighed on the CHF and allowed the pair to reverse its direction.
Major European equity indexes closed the day with strong gains on Tuesday and Wall Street's main indexes trade modestly higher despite protests and riots in major US cities.
Focus shifts to Swiss GDP report
The only data from the US on Tuesday showed that the ISM-NY's Business Conditions Index rose to 19.5 from the all-time low it registered at 4.3 in April. The US Dollar Index remains on track to close the sixth straight day in the negative territory near 97.70.
On Wednesday, Gross Domestic Product (GDP) data from Switzerland will be watched closely by market participants. Investors expect the Swiss economy to contract by 2.2% on a quarterly basis in the first quarter. A worse-than-expected reading could cause markets to price a higher-probability of the Swiss National Bank (SNB) intervening in currency markets and lift USD/CHF.
Technical levels to watch for
Author
Eren Sengezer
FXStreet
As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.
