USD/CHF consolidates biggest daily jump in a month below 0.9200 amid steady yields

• USD/CHF takes offers to refresh intraday low, pares heaviest jump since December 06.
• US 10-year Treasury yields remain steady around multi-day tops after rising the most in three months.
• Virus woes, Fed rate-hike concerns propel yields, US dollar.
• Swiss CPI, US ISM Manufacturing PMI decorate calendar.

USD/CHF refreshes intraday low to 0.9173 while paring the previous day’s heavy run-up during Tuesday’s Asian session. The Swiss currency (CHF) tracks steady yields and a lack of major catalysts to print mild losses, down 0.15% on a day.

That said, the quote rallied the most in nearly a month the previous day as the US dollar tracked firmer Treasury yields to print notable gains the previous day.

That said, the US Dollar Index (DXY) jumped the most in three weeks on Monday after the US Treasury yields jumped to the six-week top for 30-year, 20-year, 10-year and 5-year notes.

Speedy spread of the coronavirus and a jump in the cases linked to the South African covid variant, namely Omicron, provide a first push to the US bond yields. On the same line were the rising hopes of faster Fed rate hikes in 2022. Both these catalysts weigh bond prices and fuel yields.

“COVID worries have been front and center once again for investors since the start of the holiday season. The number of new COVID-19 cases has doubled in the last seven days to an average of 418,000 a day, mostly attributed to the highly transmissible but milder Omicron variant,” according to a Reuters tally.

The US inflation expectations, as per the 10-Year Breakeven Inflation Rate numbers from the Federal Reserve Bank of St. Louis (FRED), jumped to a fresh high in six weeks to portray further prices pressure ahead, allowing Fed hawks to keep controls.

Talking about the data, final prints of the US Markit Manufacturing PMI for December, 57.7 versus 57.8 prior, as well as softer figures of the US Construction Spending for November, failed to provide any clear direction to the USD/CHF pair as yields dominated the moves.

Amid these plays, the Wall Street benchmark printed losses by the S&P 500 Futures remain directionless at the latest.

Moving on, today’s Swiss Consumer Price Index (CPI) for November, market consensus 1.6% YoY versus 1.5% prior, will offer immediate direction to USD/CHF traders ahead of the US ISM Manufacturing PMI for the said month, expected 60.2 versus 61.1. However, major attention will be given to the Fed rate-hike concerns and virus updates for clear direction.

Technical analysis

Although failures to cross the 20-DMA, around 0.9200 at the latest, keep USD/CHF sellers hopeful, the 200-DMA level near 0.9175 holds the key to the pair’s further downside.