USD/CHF consolidates in a range below a multi-week high touched on Wednesday
- USD/CHF struggles to gain any meaningful traction and remains below the 0.9000 mark.
- The downside remains cushioned amid the underlying bullish sentiment around the USD.
- Worries about a global economic slowdown benefit the safe-haven CHF and cap the upside.
The USD/CHF pair attracts some dip-buying on Thursday, albeit struggles to capitalize on the intraday uptick beyond the 0.9000 psychological mark. Spot prices, however, stick to a mildly positive bias through the early European session and remain well within the striking distance of a nearly five-week high touched on Wednesday.
The US Dollar (USD) edges higher for the third successive day and stands tall near its highest level since March 24, which, in turn, is seen as a key factor acting as a tailwind for the USD/CHF pair. The recent hawkish remarks by several Federal Reserve (Fed) officials fueled speculations that the US central bank will keep interest rates higher for longer. This, along with the latest optimism that the US debt ceiling will be raised, remains supportive of elevated US Treasury bond yields and continues to underpin the Greenback.
In fact, US President Joe Biden and top congressional Republican Kevin McCarthy underscored their determination to strike a deal soon to raise the government's $31.4 trillion debt ceiling. This, in turn, suggests that the path of least resistance for the USD/CHF pair is to the upside. That said, worries over slowing global growth lend some support to the safe-haven Swiss Franc (CHF) and cap any further gains. Furthermore, the lack of strong follow-through buying warrants some caution before placing fresh bullish bets.
Market participants now look to the US economic docket, featuring the release of the usual Weekly Initial Jobless Claims, the Philly Fed Manufacturing Index and Existing Home Sales later during the early North American session. Traders will further take cues from speeches by influential FOMC members, which, along with the US bond yields, will drive the USD demand. Apart from this, developments surrounding the US debt-limit negotiations and the broader risk sentiment might provide some impetus to the USD/CHF pair.
Technical levels to watch