USD/CHF prints four-day downtrend below 0.9200 as US PMI, Durable Goods Orders loom

• USD/CHF takes offers to reverse early-day rebound, fades bounce off eight-day low.
• SNB stays ready for more rate hikes after 0.50% lift, as expected.
• Fed bets struggle to regain hawkish bias amid banking sector debacle.
• US statistics may offer an active day ahead, yields eyed too.

USD/CHF renews its intraday low near 0.9160 as it portrays the four-day losing streak during early Friday ahead of the key US data. In doing so, the Swiss Franc (CHF) pair justifies hawkish bias surrounding the Swiss National Bank (SNB) versus the dovish bets on the Federal Reserve’s (Fed) next move amid a sluggish end to the volatile week.

SNB raised its benchmark sight deposit interest rate by 50 basis points (bps) from 1.0% to 1.50% in March, on Thursday, as widely expected. With this, the SNB raises rates for the fourth straight meeting, with markets now expecting the final hike to come in June.

Following the interest rate announcements, SNB Chairman Thomas Jordan said that further rate rises cannot be ruled out to ensure price stability. The policymaker also said that taking a risk on a Credit Suisse bankruptcy would have been irresponsible while adding, “Measures taken by the federal government, FINMA and SNB have put a halt to the crisis.”

SNB governing board member Andrea Maechler also spoke on Thursday while saying, “Tension on the financial markets has markedly increased following the collapse of Silicon Valley Bank.”

Elsewhere, the Fed’s heavy lending amid the banking rout flags fears of a ballooning Fed balance sheet, which in turn renews hawkish calls for the US central bank’s next moves. However, the mixed US data and the latest Fed statement appear to challenge the policy hawks. Also challenging the US Dollar could be the comments from key market players like DoubleLine’s Gundlach who recently reiterated his dovish bias for the US central banks.

It’s worth noting that comments from US Treasury Secretary Janet Yellen and the Chair of the Basel Committee on Banking Supervision also weigh on the market’s mood and challenge the USD/CHF bears. However, the recent retreat in the yields keeps the pair sellers hopeful.

The Financial Times (FT) recently mentioned said that the head of the world’s top financial regulator, Pablo Hernández de Cos, has called for tighter rules to clamp down on risks spreading from so-called “shadow banks” to other parts of the banking system. On the other hand, US Treasury Secretary Janet Yellen said on Thursday, “China and Russia may want to develop an alternative to the US dollar,” while also showing preparedness for additional deposit actions `if warranted'.

That said, the US Chicago Fed National Activity Index (CFNAI) dropped to -0.19 in February versus 0.0 expected and 0.23 prior. Further, Weekly Initial Jobless Claims declined to 191K for the week ended on March 18, versus 192K prior and 203K market forecasts. It should be noted that the US New Home Sales rose 1.1% in February from 1.8% prior, versus 1.6% analysts’ estimation, whereas Kansas Fed Manufacturing Index for March rose to 3.0 from -9.0 prior and 6.0 expected.

Against this backdrop, the US 10-year and two-year Treasury bond yields remain depressed around 3.38% and 3.78% respectively by the press time whereas the S&P 500 Futures struggle to copy Wall Street’s positive moves.

Looking ahead, the first readings of the US S&P Global PMIs for March and Durable Goods Orders for February will be crucial for the USD/CHF pair traders to watch for clear directions.

Also read: S&P Global PMIs Preview: EU and US figures to shed light on economic progress

Technical analysis

Oversold RSI (14) challenges USD/CHF bears approaching a seven-week-old ascending support line near 0.9130. Recovery moves, however, remain elusive unless the quote stays successfully beyond the 0.9200 threshold.