USD/CHF pares the biggest daily jump in eight years near 0.9300 amid Credit Suisse crisis

• USD/CHF prints mild losses to consolidate the biggest daily gains since 2015 amid mixed sentiment.
• Credit Suisse eyes SNB loan to overcome liquidity crisis.
• Global policymakers rush to placate financial market fears after US, European banks tease pessimists.
• Second-tier Swiss, US data may entertain traders but bond market moves are the key to clear directions.

USD/CHF clings to mild losses around 0.9320 as it holds lower grounds near the intraday bottom during early Thursday. That said, the Swiss currency pair rallied the most since 2015 on Wednesday as Credit Suisse amplified financial market fears. However, the global policymakers’ efforts to tame the risk-off mood seem to help the Swiss currency pair in consolidating the latest moves.

Among the key positive developments, Reuters’ headlines suggesting that Credit Suisse eyes borrowing up to CHF50 billion from SNB to strengthen liquidity gains major attention. On the same line could be the news that anonymous sources conveyed that the US banks are less vulnerable to the Credit Suisse debacle. Furthermore, the emergency talks by the Bank of England (BoE) and market chatters suggesting no immediate negative reaction by the Federal Reserve (Fed) and ECB, during their monetary policy meetings, also seem to tame the previous risk aversion.

Amid these plays, the S&P 500 Futures rise half a percent to reverse the previous day’s losses around 3,940 whereas the US 10-year Treasury bond yields stabilize around 3.49% after falling the most in four months on Wednesday. That said, the two-year Treasury bond coupons also pause the further downside around 3.96%, after falling to the lowest levels since September 2022.

On Wednesday, the Saudi National Bank’s rejection of infusing more funds into Credit Suisse propelled the key European bank’s Credit Default Swaps (CDS) and triggered the crisis for the financial markets on Wednesday. Further amplifying the sour sentiment was the news that the European Central Bank (ECB) officials contacted banks to ask about exposures to Credit Suisse.

It should be noted that the mixed US data failed to gain any major attention, even if the US Dollar rose. That said, US Retail Sales dropped to -0.4% in February versus -0.3% expected and upwardly revised 3.2% prior while the Producer Price Index (PPI) slide to 4.6% YoY from 5.7% in January and 5.6% market forecasts. Further, NY Empire State Manufacturing Index dropped to -24.6 for March compared to analysts’ estimations of -8.0 and -5.8 prior.

Moving ahead, Swiss SECO Economic Forecasts and second-tier US data concerning employment, manufacturing and housing activities could entertain theee USD/CHF pair traders. However, major attention will be given to the bond market moves and headlines surrounding Credit Suisse, Silicon Valley Bank (SVB) and Signature Bank.

Technical analysis

Overbought RSI, failure to cross the 100-SMA and the previous support line from early February, close to 0.9325 and 0.9350 in that order, USD/CHF bears remain in the driver’s seat.