- A broad-based USD strength assisted USD/CHF to gain traction for the second straight day.
- Fed tightening worries, a strong pickup in the US bond yields continued underpinning the USD.
- Strong opening in the US equity markets weighed on the safe-haven CHF and remained supportive.
The USD/CHF pair climbed to over one-week tops during the early North American session, albeit quickly retreated few pips thereafter. The pair was last seen trading around the 0.9215 region, still up nearly 0.25% for the day.
The pair built on the previous day’s modest gains and edged higher for the second consecutive session on Tuesday. The uptick allowed pushed the USD/CHF pair back closer to over two-month tops touched last week and was sponsored by a broad-based US dollar strength.
Despite mixed signals on the US inflation, investors have been betting on the prospects for an early move by the Fed to tighten its monetary policy. This, along with a strong pickup in the US Treasury bond yields, underpinned the greenback and provided a goodish lift to the USD/CHF pair.
Bulls further took cues from a strong opening in the US equity markets, which tends to dent demand for traditional safe-haven currencies, including the Swiss franc. That said, fears over the spread of the highly infectious Delta variant of the coronavirus capped gains for the USD/CHF pair.
Market participants now look forward to the release of the Conference Board’s US Consumer Confidence Index, which might influence the USD price dynamics. Traders will further take cues from the broader market risk sentiment for some trading opportunities around the USD/CHF pair.
The key focus, however, will remain on Friday’s release of the closely watched US monthly jobs data. The popularly known NFP report will play a key role in driving the greenback in the near term and help determine the next leg of a directional move for the USD/CHF pair.
