USD/CHF’s reversal from 0.9345 extends below 0.9300
27.12.2022, 11:38

USD/CHF’s reversal from 0.9345 extends below 0.9300

  • The US dollar accelerates its downtrend and reaches levels below 0.9300.
  • Hopes of a slowdown in Fed tightening are hurting the USD.
  • News that China is easing covid restrictions further has boosted market mood.

The US Dollar resumed its near-term downtrend against the Swiss Franc on Tuesday, with the pair extending its pullback from last week’s highs at 0.9345 to levels below 0.9300. The pair drops about 0.5% so far today, retracing the previous three day’s recovery.

Hopes of Fed easing are hurting the Dollar

US macroeconomic figures released last Friday have boosted hopes of a slowdown on the Federal Reserve’s monetary tightening path in 2023, which has hurt demand for the Greenback.

The US Core Personal Consumption Expenditures Price Index, a gauge closely observed by the Fed to assess inflationary trends, eased in November for the third consecutive month, suggesting that the price pressures might have started a deceleration trend.

Furthermore, consumer spending remained practically unchanged from the previous months. These figures pave the way for the Federal Reserve to ease its tightening path.

On the other hand, Chinese authorities have announced the end of COVID-19 restrictions for inbound travelers. The National Health Committee assured that from January 8, quarantines for visitors to China will be scrapped, which has boosted risk appetite in an otherwise quiet post-Christmas market, adding selling pressure to the safe-haven USD.

Technical levels to watch

 

 

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