USD/CHF climbs to fresh 20-day highs on broad USD strength
- US Dollar Index stays above 98 ahead of FOMC.
- ZEW Expectations Index in Switzerland dropped to 8.3 from 12.5.
- Major European equity indexes register small gains on Wednesday.
The USD/CHF pair added 30 pips on Tuesday and stretched higher on Wednesday to coush its strongest level since January 10th at 0.9754. As of writing, the pair was trading at 0.9746, up 0.18% on a daily basis.
Earlier in the day, the ZEW survey revealed that the Expectations Index in January dropped to 8.3 in January from 12.5 in Switzerland to weigh on the CHF.
On the other hand, the mixed risk sentiment as reflected by modest gains in major European equity indexes despşte a sharp drop in the 10-year US Treasury bond yield seems to be making it difficult for the CHF to find demand as a safe-haven. Later in the day, the World Health Organization will be holding a press conference on the coronavirus, which could affect the risk perception in the second half of the day.
USD preserves strength ahead of FOMC
In the meantime, the US Dollar Index is staying above the 98 mark on Wednesday ahead of the FOMC's monetary policy announcements.
Previewing the first FOMC meeting of 2020, “we expect the Fed to leave interest rates unchanged at their upcoming meeting. Recent economic reports, including labor market indicators and consumer price indices were in line with our scenario of slowing economic momentum and moderate but stable inflation," said BBVA analysts. "Moreover, we expect the Fed will continue to hold interest rate for the foreseeable future unless there is a material change in their outlook.”
Technical levels to watch for