Home Forex News USD/CHF Plotting A Bounce Back From Three Month Lows

USD/CHF Plotting A Bounce Back From Three Month Lows

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  • SNB Monetary Policy report
  • Risk Sentiment
  • Dollar Resurgence

USD/CHF is struggling to bounce back after losing ground and plunging to three-month lows on Wednesday. The pair remained range bond, Thursday Morning, even as the Swiss National Bank monetary policy opted to keep interest unchanged at -0.75%.

USD/CHF Selloff

The pair has edged lower in recent weeks after hitting a stiff resistance at two-month highs of 0.980. The slide coincided with weakness in the dollar as the global economy slowly bounces back with easing fears of COVID-19 pandemic.

 

After the recent slide lower, the pair looks overstretched, one of the reasons it did bounce back from three-month lows late Wednesday trading session. Dollar strength has also come into play as traders rush to safe havens in the wake of a new wave of coronavirus infections. Geopolitical tensions between India and China has also continued to fuel risk aversion in the market, with traders rushing to the Greenback as a safe haven.

Weakness in the Swiss Franc has also contributed to the slide to three-month lows. Switzerland felt the full force of the COVID-19 pandemic even as the country failed to impose lockdown to curb the spread of the virus.

Switzerland has remained susceptible to shocks as other countries went into lockdown curbing international trade. The economy has contracted significantly in the aftermath of the pandemic. Likewise, the Swiss National Bank is poised to announce a string of monetary policy to stimulate the economy.

Surging Risk Sentiment

The Swiss Franc has remained under pressure on a resurgent dollar as risk aversion continues to influence sentiments in the forex market. The dollar has continued to strengthen as a safe-haven amidst growing concerns about the global economic recession.

Soaring tensions between Washington and Beijing over Hong Kong have all continued to drive traders into the Greenback as a safe haven. The USD/CHF remains vulnerable to rallying s tensions between India and China get out of hand, conversely fuelling risk aversion.

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