- A combination of factors prompted fresh selling around USD/CHF on Tuesday.
- Fading hopes for an early Fed lift-off continued acting as a headwind for the USD.
- A softer risk tone benefitted the safe-haven CHF and contributed to the selling bias.
The USD/CHF pair maintained its offered tone through the early North American session and dropped to fresh daily lows, around the 0.9115 region in the last hour.
The pair met with some fresh supply on Tuesday and reversed a major part of the previous day's goodish recovery move from over three-week lows, around the 0.9100 round-figure mark. The US dollar continued losing ground amid fading hopes for an earlier Fed lift-off.
The Fed Chair Jerome Powell – during the highly-anticipated speech at the Jackson Hole Symposium on Friday – reassured that the US central bank is in no hurry to raise interest rates. Powell also fell short of providing any specific timeline for the Fed's tapering plan.
Apart from this, a turnaround in the risk sentiment benefitted the safe-haven Swiss franc and exerted downward pressure on the USD/CHF pair. That said, a goodish rebound in the US Treasury bond yields acted as a tailwind for the USD and helped limit losses for the USD/CHF pair.
Market participants now look forward to the US economic docket, featuring the releases of Chicago PMI and the Conference Board's Consumer Confidence Index. This, along with the broader market risk sentiment, might produce some trading opportunities around the USD/CHF pair.
The key focus, however, will remain on the US monthly jobs data, scheduled for release on Friday. The closely-watched NFP report will now play a key role in influencing the USD price dynamics in the near term and provide a fresh directional impetus to the USD/CHF pair.
Technical levels to watch
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