USD/CHF recovers few pips from weekly low, remains below mid-0.7900s
The USD/CHF pair rebounds a few pips from a fresh weekly low touched during the Asian session on Thursday and for now, seems to have stalled this week's slide from the vicinity of the 0.8000 psychological mark. Spot prices, however, lack bullish conviction and currently trade around the 0.7940 region, unchanged for the day amid mixed cues.
Asian stocks tracked the overnight move up in the US equity markets, which, in turn, undermines demand for the safe-haven Swiss Franc (CHF).
The US Dollar (USD), on the other hand, draws some support from diminishing odds for a rate cut by the Federal Reserve (Fed) in July and turns out to be another factor acting as a tailwind for the USD/CHF pair.
However, Minutes from the June 17-18 FOMC meeting released on Wednesday left the door open for more interest rate cuts by the end of this year. This might hold back the USD bulls from placing aggressive bets.
Moreover, trade-related uncertainties could keep a lid on any optimism in the markets and contribute to capping the upside for the USD/CHF pair.
In fact, US President Donald Trump issued tariff notices to eight minor trading partners on Wednesday and said that there will be no extensions for the countries that receive letters.
Furthermore, Trump stressed that any retaliatory levies will be added to the existing US tariffs and also announced that the 50% tariff on copper imports will take effect on August 1.
This, in turn, makes it prudent to wait for strong follow-through buying before positioning for the resumption of the USD/CHF pair's recent bounce from the 0.7870 region, or the lowest level since September 2011 touched last week.
Traders now look to the release of the US Weekly Initial Jobless Claims and speeches from influential FOMC members for a fresh impetus.
Source: FXStreet
