The USD/CHF currency pair is holding steady above the critical 0.9000 psychological level, attracting dip-buyers during Thursday’s Asian session. This comes after the pair hit a one-week low the previous day, snapping a three-day losing streak. As of now, spot prices are trading near 0.9030, showing a modest gain of over 0.15% on the day. However, caution is advised, as the sharp pullback from the 0.9200 range earlier this week may not yet be over.
The US Dollar (USD) is staging a mild recovery after falling to its lowest point in over a week. The positive tone surrounding equity markets is also weighing on the safe-haven Swiss Franc (CHF), offering some support to the USD/CHF pair. However, the potential for significant USD appreciation remains limited, given ongoing market expectations for further policy easing by the Federal Reserve (Fed).
Markets are pricing in the possibility of two interest rate cuts by the US central bank by the end of the year, bolstered by the disappointing US ISM Services PMI, which dropped to 52.8 in January. This overshadowed the ADP report, which showed an increase of 183K in private-sector employment, slightly surpassing the previous month’s upwardly revised figure of 176K.
Adding to market uncertainty, concerns over the US-China trade war and the potential economic fallout from President Donald Trump’s trade tariffs may dampen optimism. These factors are likely to prevent aggressive bearish bets on the CHF and cap the USD/CHF pair’s upward momentum. Therefore, traders are advised to wait for stronger follow-through buying before positioning for further gains.
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