USD/CHF struggles near daily lows, holds above mid-0.9700s
- USD/CHF failed ahead of 0.9800 mark and retreats from 1-1/2 month tops.
- Reviving safe-haven demand boosted the CHF and exerted some pressure.
- A subdued USD price action does little to lend any support ahead of US CPI.
The USD/CHF pair remained depressed through the early European session on Thursday and is currently placed near the lower end of its daily trading range, around the 0.9765 region.
The pair failed to capitalize on the previous session's positive move and once again started retreating from the 0.9785-90 supply zone. A fresh wave of the global risk-aversion trade on Thursday provided a goodish lift to the Swiss franc's perceived safe-haven status and exerted some pressure on the major.
USD/CHF weighed down by fresh coronavirus concerns
Market concerns about the outbreak of the deadly coronavirus resurfaced on Thursday after China's Hubei province reported a sharp jump in the death toll and confirmed cases. In fact, the number of deaths in the province rose to 1,310 while 14,840 new cases were reported as of February 12.
This coupled with a subdued US dollar price action further collaborated to the pair's weaker tone. Despite fading prospects for any further rate cuts by the Fed, the greenback struggled to gain traction and remained on the defensive amid the risk-off mood-led slide in the US Treasury bond yields.
It is worth reporting that the Fed Chair Jerome Powell, in his second day of testimony on Wednesday, did little to revive hopes for any further rate cuts, rather reiterated that there were no reasons for the Fed to cut interest rates as the economy remained in a good place.
It will now be interesting to see if the pair is able to attract any dip-buying or the current pullback marks the end of the recent strong positive move witnessed since the beginning of this month. The focus now shifts to the release of the US consumer inflation figures, due later during the early North-American session.
Technical levels to watch