USD/CHF moves sideways around 0.8900 following sharp decline
- USD/CHF is consolidating weekly losses around 0.8900 on Thursday.
- Upbeat market mood seems to be capping CHF's gains.
- Focus shifts to weekly Initial Jobless Claims data from US.
The USD/CHF closed in the negative territory for the fourth straight day on Thursday and lost nearly 100 pips since the start of the week. With the market action turning subdued amid a lack of significant fundamental drivers, the pair seems to have gone into a consolidation phase and was last seen trading flat at 0.8900.
DXY remains depressed below 90.50
The broad-based selling pressure surrounding the greenback forced USD/CHF pair to push lower this week. The poor performance of US Treasury bond yields and FOMC Chairman Jerome Powell's dovish remarks caused the US Dollar Index (DXY) to drop to its lowest level in two weeks at 90.25 on Wednesday.
Powell reiterated that the Fed remains committed to supporting the economy and added that they were not looking to tighten the policy preemptively even if the labor market showed an improvement.
Ahead of the US Department of Labor's weekly Initial Jobless Claims data, the DXY is down 0.06% on the day at 90.37.
Meanwhile, the upbeat market mood, as reflected by rising major European equity indexes and a 0.3% gains seen in the S&P 500 Futures, is helping USD/CHF limit its downside despite the fact that the USD remains on the backfoot.
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.
