- USD/CHF gains positive traction for the third consecutive session on Wednesday.
- Optimism over coronavirus treatment triggered a fresh wave of global risk-on trade.
- The USD benefitted from surging US bond yields and remained support ahead of data.
The USD/CHF pair surged through the 0.9700 round-figure mark and climbed to near one-week tops in the last hour, albeit retreated few pips thereafter.
The pair gained some follow-through traction for the third consecutive session on Wednesday and added to its recent positive move amid weakening demand for traditional safe-haven assets. Some positive developments in the coronavirus saga triggered a fresh wave of the global risk-on rally, which dented the Swiss franc’s perceived safe-haven status.
USD/CHF supported by risk-on mood/stronger USDInvestors’ confidence got a strong boost on Thursday after Sky News reported that UK scientists have made a ‘significant breakthrough’ in the development of a vaccine for coronavirus. Adding to this, news on Chinese television said that the research team at Zhejiang University has found an effective drug to treat people with the new coronavirus. The risk-on mood was further reinforced by a strong intraday pickup in the US Treasury bond yields, which assisted the US dollar to build on its recent positive move and remained supportive of the pair’s goodish intraday uptick of around 50 pips. The latest optimism showed little signs of fading after WHO spokesman said that there is no known effective therapeutics against this coronavirus, albeit turned out to be one of the key factors that kept a lid on any subsequent positive move. Moving ahead, market participants now look forward to the US economic docket – featuring the release of the ADP report on private-sector employment and ISM Non-Manufacturing PMI – in order to grab some short-term trading opportunities. |
Technical levels to watch - Click to enlarge |
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