fundamental News - USD/CHF
The USD/CHF pair shot to the highest level since July 2020 during the early European session, with bulls now looking to build on the momentum beyond the 0.93200 the 50% Fibonaccia level.
The pair prolonged its recent strong upward trajectory and
continued scaling higher through the first half of the trading action on
the last day of the week. The uptick was sponsored by the strong
bullish sentiment surrounding the US dollar, which remained
well supported by the prospects for a relatively stronger US economic
recovery.
Investors remain optimistic about the US economic outlook amid the
impressive pace of COVID-19 vaccinations and the passing of the US
relief bill. The reflation trade continued pushing the US Treasury bond
yields higher, which, in turn, was seen as another
factor that provided an additional boost to the greenback.
The sell-off in the US fixed income market reignited after Fed
Chair Jerome Powell on Thursday said that the recent surge in the US
Treasury bond yields was not a disorderly move. Powell’s remarks
disappointed investors anticipating immediate action to
curb a sharp rise in long-term yields, which forced investors to unwind
bearish USD bets.
Meanwhile, feats that the rout in the bond market could trigger
distressed selling in other asset classes took its toll on the global
risk sentiment. This was evident from a weaker tone around the equity
markets. The risk-off mood, however, did little
to benefit the safe-haven Swiss franc or stall the USD/CHF pair strong
positive momentum.