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USD/CHF eases from two-month top, turns flat around mid-0.8600s ahead of US data

  • USD/CHF pulls back from a two-month high, albeit it lacks follow-through selling.
  • Bets for smaller Fed rate cuts continue to lend support to the USD and the major.
  • A positive risk tone to undermine the safe-haven CHF and limit losses for the pair.

The USD/CHF pair retreats a few pips from a two-month peak touched earlier this Thursday and trades around mid-0.8600s, nearly unchanged for the day during the first half of the European session. Meanwhile, the fundamental backdrop seems tilted in favor of bullish traders and suggests that the path of least resistance for spot prices remains to the upside. 

The US Dollar (USD) climbs to its highest level since early August and continues to draw support from growing acceptance that the Federal Reserve (Fed) will proceed with modest interest rate cuts over the next year. This keeps the yield on the benchmark 10-year US government bond above the 4% mark, which acts as a tailwind for the buck and validates the positive outlook for the USD/CHF pair. 

Apart from this, the prevalent risk-on environment, bolstered by China's stimulus measures, could undermine the safe-haven Swiss Franc (CHF) and support prospects for an extension of the USD/CHF pair's move-up witnessed over the past two weeks or so. Even from a technical perspective, the recent breakout above the 50-day Simple Moving Average (SMA) compliments the constructive setup. 

Traders now look forward to the US economic docket – featuring the release of monthly Retail Sales, the usual Weekly Initial Jobless Claims, the Philly Fed Manufacturing Index and Industrial Production figures. The data will be assessed for cues about the Fed's timeline for potential rate cuts, which, in turn, will drive the USD demand and produce short-term opportunities around the USD/CHF pair. 

The market focus will then shift to the Chinese macro data dump, including the third quarter GDP report, due for release during the Asian session on Friday, which will influence the broader risk sentiment. Nevertheless, the aforementioned supporting factors suggest that any meaningful corrective decline could be seen as a buying opportunity and is more likely to remain cushioned amid a bullish USD.

US Dollar PRICE Today

The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the strongest against the Canadian Dollar.

 USDEURGBPJPYCADAUDNZDCHF
USD 0.09%0.08%0.06%0.22%-0.21%0.03%-0.09%
EUR-0.09% -0.03%-0.02%0.13%-0.30%-0.04%-0.17%
GBP-0.08%0.03% -0.02%0.14%-0.28%-0.03%-0.13%
JPY-0.06%0.02%0.02% 0.16%-0.27%-0.05%-0.11%
CAD-0.22%-0.13%-0.14%-0.16% -0.42%-0.18%-0.27%
AUD0.21%0.30%0.28%0.27%0.42% 0.24%0.16%
NZD-0.03%0.04%0.03%0.05%0.18%-0.24% -0.10%
CHF0.09%0.17%0.13%0.11%0.27%-0.16%0.10% 

The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).

Author

Haresh Menghani

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

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