Thursday, March 28, 2024
News, Economy, Forex, Forum


USD/CHF plummets to fresh multi-year lows amid notable USD supply

USD/CHF remained depressed for the third consecutive session on Wednesday. Sustained USD selling bias was seen as a key factor…

By financial2020myday , in Forex , at December 16, 2020

USD/CHF remained depressed for the third consecutive session on Wednesday.
Sustained USD selling bias was seen as a key factor exerting pressure on the pair.
The risk-on mood did little to lend any support as the focus now shifts to FOMC.
The USD/CHF pair witnessed some aggressive selling during the early European session and dropped to fresh multi-year lows, around the 0.8825 region in the last hour.

Following a brief consolidation through the first half of the trading action on Wednesday, the pair met with some fresh supply and edged lower for the third consecutive session. The downfall was exclusively sponsored by the prevalent bearish sentiment surrounding the US dollar.

In fact, the USD Index tumbled to fresh two-and-half-year lows amid firming expectations for additional US fiscal stimulus measures. Apart from this, a fresh leg down in the US Treasury bond yields further undermined the greenback and contributed to the USD/CHF pair’s ongoing decline.
The USD selling picked up pace amid a sudden pickup in the shared currency following the release of better-than-expected German PMI prints for December. This comes on the back of hopes for a Brexit deal, which continued lending some support to the sterling and added to the USD selling bias.

Meanwhile, the latest leg of a sudden fall over the past hour or so could further be attributed to some technical selling below mid-0.8800s. This might have already set the stage for additional weakness, through the prevalent risk-on mood might help limit the downside, at least for now.

The global risk sentiment remained well supported by the recent optimism over the rollout of vaccines for the highly contagious coronavirus disease. This, in turn, could weigh on the safe-haven Swiss franc and help ease the bearish pressure ahead of the latest FOMC monetary policy update.

The Fed is scheduled to announce its policy decision later during the US session and is widely expected to keep the overnight interest rate pinned near zero. Hence, the key focus will be on the accompanying monetary policy statement and updated economic projections – the so-called dot-plot.

Apart from this, the Fed Chair Jerome Powell’s comments at the post-meeting press conference will be looked upon for clues about the policy outlook. This, in turn, would influence the near-term USD trajectory and help determine the next leg of a directional move for the USD/CHF pair.

Comments


Leave a Reply


Your email address will not be published. Required fields are marked *