USD/CHF pares early gains, trades flat near 0.9100
- USD/CHF trades in a tight range above 0.9100 on Friday.
- Risk aversion helps CHF stay strong against its rivals.
- US Dollar Index consolidates above 93.00 ahead of US data.
The USD/CHF pair rose to a daily high of 0.9125 on Friday but struggled to preserve its bullish momentum. As of writing, the pair was virtually unchanged on a daily basis at 0.9100.
Focus shifts to US data
The risk-averse market environment seems to be helping the CHF stay resilient against its rivals as a safe-haven. Earlier in the day, the data published by the Eurostat showed that the euro area economy contracted by 15% on a yearly basis in the second quarter. Reflecting the flight to safety, major European equity indexes are losing between 1.3% and 1.65% on a daily basis.
Meanwhile, the US Dollar Index is staying relatively quiet above 93.00 as investors seem to be staying on the sidelines ahead of key macroeconomic data releases from the US.
In the early American session, the US Census Bureau will release July Retail Sales data. Investors expect the report to show an increase of 1.9% following June's impressive upsurge of 7.5%.
Previewing this data and its potential impact on the greenback, "the sell-off in the US dollar over the past month was predicated on the second wave Covid-19 impact on the economy," said FXStreet analyst Joseph Trevisani. "If retail sales do not in fact drop as anticipated, the currency will have another data point for a stronger USD.”
Other data from the US will include Industrial Production and the University of Michigan's Consumer Sentiment Survey.
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.
