USD/CHF closes in on 0.9500 amid risk aversion, USD weakness
- US Dollar Index fails to build on Wednesday's recovery gains.
- Major European equity indexes suffer heavy losses on flight to safety.
- Coming up: Weekly Jobless Claims and Factory Orders data from US.
The USD/CHF came under renewed bearish pressure on Thursday and started to push lower toward the critical 0.9500 hande. Pressured by the broad-based USD weakness and the dismal market mood, the pair touched a daily low of 0.9523 and was last seen trading at 0.9532, down 0.37% on the day.
The relief rally witnessed in global equity indexes on Wednesday following the Fed's emergency rate cut seems to have already faded away with investors shifting their focus to developments surrounding the coronavirus outbreak and its impact on the global economy.
As of writing, European stock indexes were down more than 1% and the 10-year US Treasury bond yield was erasing 8.3% on its way to yet another all-time low. Moreover, Wall Street's main indexes look to open the day deep in the negative territory to confirm the intense flight-to-safety.
Will Fed cut rates again in March?
Despite the Fed's 50 basis points rate cut on Tuesday, the CME Group FedWatch Tool shows that markets are already pricing a 63.6% possibility of another 25 basis points rate cut on March 18th to weigh on the greenback. Ahead of the weekly Jobless Claims, fourth-quarter Unit Labor Costs and January Factory Orders data, the US Dollar Index is testing the 97 handle to keep the bearish pressure on the pair intact.
Technical levels to watch for