- USD/CHF picks up bids to reverse yesterday’s pullback move.
- Swiss PMI, real retail sales also softened on the back of weak Q4 GDP.
- US ISM PMI details, talks with hawkish Fed raise inflation concerns and push US Treasury yields higher.
- The second layer of data, the risk catalyst, is the key to clear direction.
USD/CHF licks its wounds near 0.9400 as the Swiss currency pair picks up bids in the early hours of Thursday following a weak start to March. In doing so, the citations provide more solid details of US data and pessimistic statistics domestically against hawkish Fed talks that may be reminiscent of strong Treasury yields and a bullish U.S. dollar. justify the
That said, Switzerland’s real retail sales fell 2.2% year-on-year in January, compared with a previous measurement that was revised down to -3.0%, against a projected growth rate of 2.2%. So did the Swiss SVME Purchasing Managers’ Index for February, which had a market forecast of 48.9, compared to 49.3 earlier. Note that Switzerland’s Gross Domestic Product (GDP) reached 0% in the fourth quarter of 2022 (Q4).
Meanwhile, the U.S. ISM manufacturing PMI details renewed inflation concerns as the headline gauge rose to 47.7 from 47.4 versus expectations of 48.0, while prices paid and new orders were each down five months. It was the highest number in 4 months.
Not only the data, but hawkish Federal Reserve (Fed) negotiations challenge the previous day’s US dollar weakness and USD/CHF pullback. “Wage growth is currently too high to match 2% inflation,” said Minneapolis Fed President Neil Kashkari. Policymakers also noted that it is a concern that the Federal Reserve’s rate hikes have so far not brought down service inflation.
However, it’s worth noting that the previously weaker US data dump and China-influenced risk-on mood, as well as the consolidation at the start of the month, seemed to tease the USD/CHF bear market.
Amid these developments, US 10-year Treasury yields topped 4.0%, the highest level since early November 2022, while 2-year Treasury yields topped 4.90%, back to June 2007 levels. rose. Rising U.S. Treasury yields signal market concerns over inflation and recession, which probed Wall Street’s bull market, weighed on recent S&P 500 futures, and hinted at a possible U.S. dollar rally. .
Looking ahead, the light calendar urges USD/CHF traders to track the risk catalyst of emerging impulses.
technical analysis
The 13-day bullish channel currently between 0.9345 and 0.9480 is making USD/CHF buyers hopeful.