USD/CHF retreats below 0.9200 despite SNB’s Zurbruegg back negative rates
- USD/CHF struggles to month-start keep recovery moves, sidelined of late.
- SNB Vice President Fritz Zurbruegg backed negative rates to tame the CHF strength.
- Market sentiment improves on concerns over vaccine, Iran and US-China.
USD/CHF eases to 0.9180 during Monday’s Asian session. In doing so, the Swiss currency (CHF) pair fades the previous two-week upside momentum even as the Swiss National Bank (SNB) official rejects rate hike concerns.
SNB Vice President Fritz Zurbruegg appeared for an interview with Sonntagszeitung while highlighting the need for negative rates amid the global situation. “If we were to hike interest rates now, the franc would appreciation markedly, economic growth would slow and joblessness would increase,” said the policymaker.
It should be noted, however, that the recent risk-on mood weighs on the US dollar’s safe-haven demand and drags the USD/CHF prices down.
The chatters over US stimulus, Iran and the easing of the Sino-American tussles join the vaccine optimism to favor the market sentiment during the week start. That said, the S&P 500 Futures rise 0.20% by the press time.
US Democrats are up for easing their previous demands to push forward President Joe Biden’s $3.5 trillion stimulus. Biden’s six-pronged strategy and the US-China talks after multiple months of silence favor market sentiment and commodity prices. Additionally, the International Atomic Energy Agency (IAEA) Chief Rafael Grossi recently visited Tehran and returned with the good news of striking a deal with Iran to solve "the most urgent issue" between them.
On the contrary, virus woes and North Korea’s testing of the long-range cruise missile challenge the risk appetite and USD/CHF sellers as well.
Looking forward, US inflation figures and retails sales are the key data to watch during the week. However, a light calendar for Monday keeps the risk catalysts on the driver’s seat.
Technical analysis
Unless breaking a five-week-old rising trend line around 0.9150, USD/CHF bulls remain hopeful to battle the early August tops near 0.9245.