USD/CHF likely to break under 0.9000 – MUFG

Analysts at MUFG Bank, expect the USD/CHF pair will break under the 0.9000 area. They explain COVID-19 vaccine news challenges the Swiss franc strength, but major central banks will continue to keep loose monetary policy in place well into the recovery supporting the appeal of CHF.

Key Quotes:

“USD/CHF recently tested and held key support at the 0.9000-level but we expect it to break going forward. We continue believe that the election victory for Joe Biden supports our outlook for further USD weakness. We still expect the Fed to step up monetary easing to support the economic recovery especially now that Congress is likely to remain divided and the third COVID wave is intensifying in the US.”

“The latest FOMC minutes signalled that the Fed is likely to provide a stronger commitment to maintain QE purchases throughout next year even as the recovery strengthens. Similarly, the ECB are set to announce a further significant expansion of up to EUR500 billion of their own QE programme in December which boosts the relative appeal of the CHF against the EUR as well. As a result, we believe it is premature to see a sustainable reversal lower for currency debasement trades which could rebound next year if inflation picks up while loose monetary policy remains in place. The CHF has been one of the main beneficiaries of the currency debasement trade alongside the price of gold.”

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.

Feed news

Latest Forex News

Latest Forex News

Editors’ Picks

GBP/USD retreats from new highs amid dollar strength

GBP/USD has fallen off the peak of 1.3719, the highest since 2018, amid fresh dollar strength. Optimism about the UK's vaccine campaign and lower cases boosted sterling earlier. The greenback awaiting Biden's first moves as President. 


EUR/USD falls toward 1.21 ahead of Biden´s inauguration

EUR/USD has been descending toward 1.21. President-elect Biden is inaugurated later in the day and hopes of stimulus are high after Treasury Secretary nominee Yellen's testimony. 


Gold: Bulls recapture 200-DMA ahead of Biden's inauguration

Gold prices are attempting to correct higher above 200-DMA. The metal cheers rising US inflation expectations amid hopes of a massive stimulus package under the incoming Biden administration. 

Gold news

Bitcoin Price Prediction: Shaking a tree always makes the ripe fruit fall

BTC price is moving away from the historical high and seeks support at the 23.6% level of the Fibonacci retracement system from the entire previous rally.

Read more

US Dollar Index: Upside target remains at 91.00

DXY met buyers in the 90.30 region earlier on Wednesday and now resumes the upside to the 90.50/55 band.

US Dollar Index News