- USD/CHF gained some positive traction on Monday and snapped two days of the losing streak.
- Hawkish Fed expectations acted as a tailwind for the USD and provided a modest lift to the pair.
- COVID-19 jitters might underpin the safe-haven CHF and cap any meaningful gains for the major.
The USD/CHF pair built on its steady intraday bounce from over three-week lows and climbed to daily tops, around the 0.9160-65 region during the first half of the European session.
The pair attracted some buying on the first day of a new trading week and for now, seems to have stalled its recent sharp pullback from near three-month tops touched earlier this July. This marked the first day of a positive move in the previous three sessions and was sponsored by a goodish pickup in the US dollar demand.
Expectations that the Fed is moving closer to tighten its monetary policy stance sooner assisted the USD to regain some positive traction on Monday. It is worth recalling that the June FOMC meeting minutes released last Wednesday revealed that Fed officials agreed on the need to be ready to act if inflation or other risks materialize.
Hence, the market focus will remain on the latest US consumer inflation figures, due on Tuesday. Apart from this, Fed Chair Jerome Powell's semi-annual congressional testimony on Wednesday and Thursday will be looked upon for clues about the US central bank's policy outlook, which will influence the USD price dynamics in the near term.
Meanwhile, the supporting factor, to a larger extent, was offset by concerns about the economic fallout from the spread of the highly contagious Delta variant of the coronavirus. This was evident from a generally weaker tone around the equity markets, which might underpin the safe-haven Swiss franc and cap gains for the USD/CHF pair.
Moreover, there isn't any major market-moving economic data due for release from the US. This, in turn, warrants some caution for bullish traders and makes it prudent to wait for some strong follow-through buying before positioning for any further appreciating move for the USD/CHF pair.
Technical levels to watch
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. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
USD/JPY jumps above 156.00 on BoJ's steady policy
USD/JPY has come under intense buying pressure, surging past 156.00 after the Bank of Japan kept the key rate unchanged but tweaked its policy statement. The BoJ maintained its fiscal year 2024 and 2025 inflation forecast, disappointing the Japanese Yen buyers.
AUD/USD consolidates gains above 0.6500 after Australian PPI data
AUD/USD is consolidating gains above 0.6500 in Asian trading on Friday. The pair capitalizes on an annual increase in Australian PPI data. Meanwhile, a softer US Dollar and improving market mood also underpin the Aussie ahead of the US PCE inflation data.
Gold price keeps its range around $2,330, awaits US PCE data
Gold price is consolidating Thursday's rebound early Friday. Gold price jumped after US GDP figures for the first quarter of 2024 missed estimates, increasing speculation that the Fed could lower borrowing costs. Focus shifts to US PCE inflation on Friday.
Stripe looks to bring back crypto payments as stablecoin market cap hits all-time high
Stripe announced on Thursday that it would add support for USDC stablecoin, as the stablecoin market exploded in March, according to reports by Cryptocompare.
US economy: Slower growth with stronger inflation
The US Dollar strengthened, and stocks fell after statistical data from the US. The focus was on the preliminary estimate of GDP for the first quarter. Annualised quarterly growth came in at just 1.6%, down from the 2.5% and 3.4% previously forecast.