USD/CHF edges higher toward 0.9200, eyes on Powell's testimony
- USD/CHF continues to push higher after closing in the positive territory on Tuesday.
- US Dollar Index holds above 92.50 ahead of PPI data.
- FOMC Chairman Jerome Powell will deliver the semiannual report to Congress.
Supported by the broad-based USD strength, the USD/CHF pair climbed to a five-day high of 0.9201 on Tuesday before closing at 0.9184. On Wednesday, the pair continues to edge slightly higher and was last seen gaining 0.15% on the day at 0.9198.
Focus shifts to Powell's testimony
The sharp upsurge witnessed in the US Treasury bond yields and the high-than-expected inflation reading provided a boost to the greenback on Tuesday. The US Bureau of Labor Statistics reported that the Consumer Price Index (CPI) rose to 5.4% on a yearly basis in June from 5% in May, surpassing the market expectation of 4.9% by a wide margin. Reflecting the broad-based USD strength, the US Dollar Index (DXY) gained 0.6% on a daily basis.
On Wednesday, the DXY is posting modest daily losses a little above 92.60 but USD/CHF holds in the green. Later in the session, the Producer Price Index from the US will be looked upon for fresh impetus.
More importantly, FOMC Chairman Jerome Powell will deliver the US Federal Reserve's semiannual report to Congress. Previewing this event, "Powell's mid-July testimony could mark a dovish shift – or at least a retreat from previous hawkishness – and that could weigh on the dollar," said FXStreet analyst Yohay Elam.
Powell Preview: Three reasons to expect the Fed Chair to down the dollar.
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.
