USD/CHF weakens to 0.9025 area amid modest USD weakness
The USD/CHF pair met with some supply during the Asian session on Thursday (20/02) and for now, seems to have stalled its three-day winning streak to weekly tops, around the 0.9055 area touched the previous day. The spot price is currently trading near the lower end of its daily range, around the 0.9025 region, and seems vulnerable to slide further.
US President Donald Trump said on Wednesday that he will announce tariffs on a number of products next month or even sooner. This fueled concerns about a global trade war and dampened investors’ appetite for riskier assets, which was evident from a generally softer tone around the equity markets and benefitted traditional safe-haven currencies, including the Swiss Franc (CHF). Additionally, the emergence of some US Dollar (USD) selling exerted some downward pressure on the USD/CHF pair.
The global flight to safety triggered a fresh leg down in the US Treasury bond yields and to a larger extent, overshadowed the hawkish FOMC minutes released on Wednesday. This, in turn, failed to help the USD Index (DXY), which tracks the greenback against a basket of currencies, to build on its recovery from near two-month lows tested earlier this week. That said, expectations for an extended pause on interest rates by the Federal Reserve (Fed) could support the dollar and the USD/CHF pair. Hence, it would be prudent to wait for a strong follow-through selling before confirming that the pair’s recovery move from the 0.8970-0.8965 horizontal support, or YTD lows has run out of steam. Traders now look forward to Thursday’s US economic docket – featuring the release of the usual Weekly Initial Jobless Claims and the Philly Fed Manufacturing Index. Apart from this, speeches by influential FOMC members could influence the USD and the USD/CHF pair price dynamics.
Source: FXStreet
