- USD/CHF gains traction for the fifth straight day and climbs to a nearly two-week high.
- Hawkish Fed expectations, rising US bond yields boost the USD and remain supportive.
- The risk-off mood underpins the safe-haven CHF and cap gains, only for the time being.
The USD/CHF pair extends this week's positive move for the fifth successive day and climbs to a nearly two-week high during the first half of the European session. The intraday positive move, however, stalls just ahead of the 0.9600 mark amid the prevalent risk-off mood, which tends to benefit the safe-haven Swiss franc.
Growing worries about a global economic downturn continue to weigh on investors' sentiment, which is evident from a generally weaker tone around the equity markets. This, in turn, drives some haven flows towards the CHF and acts as a headwind for the USD/CHF pair. That said, haven flows also support the US dollar and sustained buying favours bullish traders.
In fact, the USD Index (DXY), which tracks the greenback's performance against a basket of currencies, climbs to its highest level since July 18 and remains well supported by hawkish Fed expectations. The markets seem convinced that the Fed will stick to its policy tightening cycle. The recent comments by several Fed officials and the incoming positive US macro data reaffirm market bets.
This, in turn, pushes the yield on the benchmark 10-year US government bond back closer to the 3.0% threshold and should continue to act as a tailwind for the greenback. The fundamental backdrop suggests that the path of least resistance for the USD/CHF pair is to the upside. Hence, any meaningful pullback could be seen as a buying opportunity and remain limited.
In the absence of any major market moving economic releases from the US, the US bond yields will drive the USD demand. Apart from this, the broader risk sentiment could produce some trading opportunities around the USD/CHF pair. Nevertheless, spot prices remain on track to register strong weekly gains and reverse a major part of last week's slide to a four-month low.
Technical levels to watch
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. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD loses traction, retreats below 1.0600
EUR/USD lost its recovery momentum and declined below 1.0600 in the American session on Friday, erasing a portion of its daily gains in the process. Nevertheless, the risk-positive market atmosphere after PCE inflation data helps the pair limit its losses.
GBP/USD turns negative on the day below 1.2200
GBP/USD reversed its direction and slumped below 1.2200 in the American session on Friday after rising above 1.2270 earlier in the day. Position readjustments and profit-taking on the last trading day of the quarter seems to be weighing on Pound Sterling.
Gold reverses direction, drops below $1,860
Following a steady rebound toward $1,880 on Friday, Gold price made a sharp U-turn and turned negative on the day near $1,860. Although the 10-year US T-bond yield is down more than 1%, XAU/USD struggles to find demand on the last day of Q3.
Polkadot Price Forecast: DOT reversal seems inevitable after 92% correction from all-time high
Polkadot price, in nearly two years, has shed 92.91% from its all-time high of $55.09. The massive downswing in DOT has pushed it down to levels that were last seen in October 2020. Hence, the chances of this altcoin forming a bottom and rallying are high.
Earnings beat triggers Nike to spike 9%
Nike (NKE) stock has surged over 9% in Friday’s premarket, climbing above $98 per share, following late Thursday’s fiscal first-quarter earnings release. Nike beat pessimistic earnings expectations by more than 23% and hiked its dividend by 9%.