USD/CHF drops to fresh two-year low as coronavirus keeps bears at the helm

Following its drop to the fresh low since late-March 2018, USD/CHF seesaws around 0.9440, down 0.22%, during the initial Friday. The extension of coronavirus (COVID-19) carnage joins increasing odds for the Fed to announce another rate cut. While identifying this, investors keep avoiding the risks while keeping safe havens like the Swiss franc on the platter.

While emergencies in California and rising death toll elsewhere in the US kept the risk-tone heavy during Thursday, updates from Washington played their role during the early Asian session on Friday. Also increasing the fears of COVID-19 were the comments from the US Vice President Mike Pence who accepted the lack of virus testing kits. It should also be noted that the US House passed $8.3 billion emergency bill to counter the deadly virus.

Though, the US Federal Reserve officials continue to turn down the odds of any further rate cuts while showing readiness for additional steps if necessary.

The Chinese economy is likely to bear the burden of the disease that took a toll on the global economy whereas South Korea and Japan are also struggling with the illness.

To portray the market’s risk-off, the US 10-year treasury yields drop 11 basis points (bps) to a fresh record low of 0.813% whereas stocks in Asian sail into the sea of red by the press time.

Moving on, investors will now keep eyes on the coronavirus headlines ahead of the US employment data. Forecasts suggest the pandemic to weigh on the headlines US Nonfarm Payrolls, to 175K from 225K prior.

Technical Analysis

During the bears’ further dominance, which is quite expected unless prices firm above January low near 0.9612, 0.9400 and March 2018 low near 0.9340/35 will be the keys to watch.