- USD/CHF edged higher for the third straight day and inched back closer to two-month tops.
- Hawkish Fed outlook continued underpinning the USD and remained supportive of the move.
- A generally positive risk tone weighed on the safe-haven CHF and further extended support.
The USD/CHF pair maintained its bid tone through the first half of the European session and was last seen trading around the 0.9220-25 region.
Following the previous day's modest pullback, the USD/CHF pair caught some fresh bids on Wednesday and inched back closer to the two-month tops touched last week. This marked the third consecutive day of a positive move and was sponsored by a combination of factors – a modest US dollar strength and the underlying bullish sentiment in the financial markets.
The USD remained supported by speculations that the Fed will tighten its monetary policy if price pressures continue to intensify. The market expectations were further fueled by the Richmond Federal Reserve President Thomas Barkin's comments, saying that the Fed has made substantial further progress toward its inflation goal to begin tapering asset purchases.
The greenback was also underpinned by Tuesday's upbeat US Consumer Confidence Index, which soared to a fresh pandemic high in June. The data pointed to growing optimism above the economy and further boosted investors' sentiment. This, in turn, weighed on traditional safe-haven currencies, including the Swiss franc, and exerted additional support to the USD/CHF pair.
Market participants now look forward to the US economic docket – featuring the release of ADP report on private-sector employment, Chicago PMI and Pending Home Sales. This, along with the US bond yields, might influence the USD price dynamics. Traders might further take cues from the broader market risk sentiment to grab some short-term opportunities around the USD/CHF pair.
The key focus, however, will remain on Friday's US monthly jobs data – popularly known NFP. The closely watched report could influence the Fed's near-term monetary policy outlook, which will play a key role in driving the USD and assist investors to determine the next leg of a directional 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
AUD/USD holds above 0.6500 in thin trading
The Australian Dollar managed to recover ground against its American rival after AUD/USD fell to 0.6484. The upbeat tone of Wall Street underpinned the Aussie despite broad US Dollar strength and tepid Australian data.
EUR/USD comfortable below 1.0800 lower lows at sight
The EUR/USD pair lost ground on Thursday and settled near a fresh March low of 1.0774. Strong US data and hawkish Fed speakers comments lead the way ahead of the release of the US PCE Price Index on Friday.
Gold price finishes Thursday’s session set to reach new all-time highs
Gold price rallied during the North American session on Thursday and hit a new all-time high of $2,225 in the mid-North American session. Precious metal prices are trending higher even though US Treasury yields are advancing, underpinning the Greenback.
Bitcoin price extends retreat from $69K as old whales shift their holdings to new whales
Bitcoin price continues to move further away from the $69,000 threshold, gaining ground as BTC bulls hope for a retest of the $73,777 peak. This is because of the general assumption that clearing this blockade would set the tone for a reach higher, marking a new all-time high.
A Hollywood ending for fourth quarter GDP
The latest revisions put Q4 GDP at 3.4%, the second fastest quarterly growth rate in two years. Much of the upside was attributable to stronger consumer spending, yet fresh profits data affirmed it was a good quarter for the bottom line as well with profits up by the most since the Q2-2022.