USD/CHF witnessed selling for the third straight day
The USD/CHF pair met with a fresh supply near the 0.9710 area on Friday and dropped to a two-week low during the European session. The pair was last seen trading around the 0.9630 region, down 0.35% for the day. The Swiss National Bank (SNB) joined other major central banks in tightening the monetary policy and delivered a surprise interest rate hike of 50 bps on Thursday. In the accompanying policy statement, the SNB left the door open for further rate hikes to counter rising inflationary pressures, which continued lending support to the Swiss franc. This, in turn, was seen as a key factor that exerted downward pressure on the USD/CHF pair for the third successive day.
The ongoing decline seemed rather unaffected by the emergence of fresh buying around the US dollar, bolstered by expectations that the Fed would stick to its policy tightening path to curb soaring inflation. Even the risk-on impulse, which tends to drive flows away from the safe-haven CHF, failed to lend any support to the USD/CHF pair.
With the latest leg down, spot prices have now retreated 430 pips from the vicinity of the YTD high, around the 1.0050 region touched on Wednesday. Some follow-through selling below the 0.9600 round-figure mark would be seen as a fresh trigger for bearish traders and set the stage for additional near-term losses for the USD/CHF pair. Market participants now look forward to the US economic docket, featuring Industrial Production and Capacity Utilization Rate. This, along with the USD price dynamics and the broader market risk sentiment, might provide some meaningful trading impetus to the USD/CHF pair ahead of an extended weekend in the US.
With the latest leg down, spot prices have now retreated 430 pips from the vicinity of the YTD high, around the 1.0050 region touched on Wednesday. Some follow-through selling below the 0.9600 round-figure mark would be seen as a fresh trigger for bearish traders and set the stage for additional near-term losses for the USD/CHF pair. Market participants now look forward to the US economic docket, featuring Industrial Production and Capacity Utilization Rate. This, along with the USD price dynamics and the broader market risk sentiment, might provide some meaningful trading impetus to the USD/CHF pair ahead of an extended weekend in the US.