- USD/CHF continues to trade lower in the Asian session.
- US 10-year bond yields weigh on the demand for the US dollar.
- Swiss Franc gains on its safe haven appeal.
The depreciation in the US dollar keeps USD/CHF edgy on Monday morning in the Asian session. The pair is moving in a narrow trade band of 0.8950-0.9000 for the past three weeks.
At the time of writing, the USD/CHF pair is trading at 0.8989, down 0.4% for the day.
The US dollar trades little changed on Monday after a steep decline on Friday from the high of 90.60 to touch the lower level near 90.01. The move in the US dollar came as investors weighed weaker than expected economic data as it poured water on the prospects of rising interest rates.
The US economy added 559K jobs in May, below the market consensus at 650K. The Factory orders contracted 0.6% in April, the first decline in the previous 12 months, against the market expectations of a 0.2% fall.
The softer than expected data was assessed by the market participants as a weaker argument against the rate hike bet, and there is no urgency for the Fed to begin tapering its monthly purchase of $120 billion bonds. This, in turn, turns investors away from the greenback.
Meanwhile, the US Treasury Secretary Janet Yellen on the weekend said that US President Joe Biden’s $4 trillion spending plan would be good for the US economy, even if it contributes to rising inflation and results in higher interest rates. These comments provide some lower grounds to the US dollar.
On the other hand, the Swiss Franc maintains its safe-haven appeal. The currency is always affected by the forex intervention tool as being quoted by the Swiss National Bank, Vice Chairman Fritz Zurbruegg. The policymakers remain concerned about the reduced demand for safer assets as the global economic outlook improves.
The Swiss central bank said on Tuesday, “inflation is still very low in the country and Gross Domestic Product (GDP) is not yet at pre-pandemic stimulus.” This favors the SNB’s ultra expansive monetary policy.
As for now, traders are looking for the release of Swiss Unemployment data and CPI figures to take the clue of market sentiment.
USD/CHF Additional Levels
Note: All information on this page is subject to change. The use of this website constitutes acceptance of our user agreement. Please read our privacy policy and legal disclaimer. Opinions expressed at FXstreet.com are those of the individual authors and do not necessarily represent the opinion of FXstreet.com or its management. Risk Disclosure: Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts.
Recommended content
Editors’ Picks
EUR/USD clings to daily gains above 1.0650
EUR/USD gained traction and turned positive on the day above 1.0650. The improvement seen in risk mood following the earlier flight to safety weighs on the US Dollar ahead of the weekend and helps the pair push higher.
GBP/USD recovers toward 1.2450 after UK Retail Sales data
GBP/USD reversed its direction and advanced to the 1.2450 area after touching a fresh multi-month low below 1.2400 in the Asian session. The positive shift seen in risk mood on easing fears over a deepening Iran-Israel conflict supports the pair.
Gold holds steady at around $2,380 following earlier spike
Gold stabilized near $2,380 after spiking above $2,400 with the immediate reaction to reports of Israel striking Iran. Meanwhile, the pullback seen in the US Treasury bond yields helps XAU/USD hold its ground.
Bitcoin Weekly Forecast: BTC post-halving rally could be partially priced in Premium
Bitcoin price shows no signs of directional bias while it holds above $60,000. The fourth BTC halving is partially priced in, according to Deutsche Bank’s research.
Week ahead – US GDP and BoJ decision on top of next week’s agenda
US GDP, core PCE and PMIs the next tests for the Dollar. Investors await BoJ for guidance about next rate hike. EU and UK PMIs, as well as Australian CPIs also on tap.