- USD/CHF attracts some buyers on Thursday and draws support from a combination of factors.
- A positive risk tone undermines the safe-haven CHF and lends support amid a modest USD uptick.
- Investors now look forward to the Advance US Q1 GDP report to grab short-term opportunities.
The USD/CHF pair gains some positive traction on Thursday and builds on the previous day's late recovery from the vicinity of mid-0.8800s, or its lowest level since January 2021. The pair sticks to its positive bias through the first half of the European session and is currently placed near the weekly high, around the 0.8930-0.8935 region.
A modest recovery in the global risk sentiment - as depicted by a generally positive tone around the equity markets - undermines the safe-haven Swiss Franc (CHF) and acts as a tailwind for the USD/CHF pair. The US Dollar, on the other hand, draws support from a further rise in the US Treasury bond yields, bolstered by bets for another 25 bps Fed rate-hike in May, and turns out to be another factor lending some support to the major.
That said, fresh concerns about banking contagion risks in the US, along with the debt ceiling standoff and looming recession risks, have been fueling speculations about an imminent rate cut by the Fed later this year. This might hold back the USD bulls from placing aggressive bets and keep a lid on any meaningful upside for the USD/CHF pair. Traders also seem reluctant ahead of the release of the Advance US Q1 GDP report.
The first estimate is anticipated to show that growth in the world's largest economy decelerated to a 2.0% annualized pace during the January-March period from the 2.6% recorded in the previous quarter. Any significant divergence from the expected reading could infuse some volatility around the USD and provide some impetus to the USD/CHF pair. Apart from this, the broader risk sentiment could produce short-term opportunities.
The market focus will then shift to the Fed's preferred inflation gauge - the US Core PCE Price Index - due on Friday, which will play a key role in influencing the USD price dynamics and help determine the near-term trajectory for the USD/CHF pair. This makes it prudent to wait for strong follow-through buying before confirming that spot prices have formed a bottom around the 0.8850 region and positioning for any further gains.
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

EUR/USD tests daily lows near 1.0350 on NFP
The buying bias in the Greenback gathers extra pace on Friday after the US economy created fewer jobs than initially estimated in January, dragging EUR/USD to the area of new lows near 1.0350.

GBP/USD flirts with daily lows near 1.2420, Dollar picks up pace
The continuation of the rebound in the US Dollar motivates GBP/USD to accelerates its losses and revisit the 1.2420 area, or daily lows, following the release of US NFP in January.

Gold tests fresh lows near $2,860 after NFP
Gold prices trim their early advance on Friday, deflating to the vicinity of the $2,860 region per ounce troy following the publication of the US labour market report in January.

Key takeaways from the January Payrolls report
The January payrolls number was weaker than expected at 143k, vs a reading of 175k. However, to counteract the downside surprise in the NFP number, the unemployment rate fell to 4% from 4.1%, and average wage data jumped by 0.5% on the month, to 4.1%, the market had been looking for a decline to 3.8%.

Top Trumps: The global economy’s House of Cards
The year has barely started and we are learning the hard way what Donald Trump’s second term in office means for markets, analysts and global policymakers. It's like living through an episode of the political thriller, House of Cards.

The Best Brokers of the Year
SPONSORED Explore top-quality choices worldwide and locally. Compare key features like spreads, leverage, and platforms. Find the right broker for your needs, whether trading CFDs, Forex pairs like EUR/USD, or commodities like Gold.