USD/CHF bears approach 0.9450 with eyes on Swiss GDP, Fed Chair Powell

• USD/CHF renews intraday low during the first negative daily performance in four.
• Improvement in market sentiment, downbeat US Treasury bond yields weigh on the US Dollar.
• Swiss Q3 GDP, US CB Consumer Confidence could offer immediate directions.

USD/CHF takes offers to refresh the intraday low near 0.9460 heading into Tuesday’s European session as it snaps the three-day uptrend. Although the risk-on mood seems to weigh on the Swiss Franc (CHF) pair, a cautious mood ahead of the key data/events tests the downside momentum of late.

The market’s optimism could be linked to the easing of China’s daily covid infections from an all-time high of 40,347 to 38,645. Further, a rally in the Chinese reality stocks, backed by the national securities regulator’s lifting of a ban on equity refinancing for listed property firms, also seemed to have favored the market optimism and weighed on the US Dollar. “The China Securities Regulatory Commission (CSRC) said late on Monday it would broaden equity financing channels, including private share placements for China and Hong Kong-listed Chinese developers, lifting a ban that has been in place for years,” mentioned the news.

It should be noted that the mixed comments from the US Federal Reserve (Fed) policymakers and cautious mood before the release of Switzerland’s third quarter (Q3) Gross Domestic Product (GDP) seem to probe the pair sellers of late.

That said, Richmond Federal Reserve Bank President Thomas Barkin recently mentioned that he supports smaller interest-rate hikes ahead as the central bank moves to bring down too-high inflation. Previously, Cleveland Fed President Loretta Mester marked the need to see several more good inflation reports and more signs of moderation to back the pause in rate hikes.

On the same line, St. Louis Fed President James "Jim" Bullard stated that the situation calls for much higher interest rates than what we've been used to. Further, New York Federal Reserve Bank President John Williams said that he believes the Fed will need to raise rates to a level sufficiently restrictive to push down on inflation and keep them there for all of next year. Additionally, Fed Vice Chair Lael Brainard advocated for tighter monetary policy while citing risk-management reasons.

Amid these plays, the US stock futures and equities in the Asia-Pacific region print mild gains despite the downbeat performance of Wall Street. Further, the US 10-year Treasury yields remain depressed near 3.69% by the press time and weigh on the US Dollar amid the risk-on mood.

Looking forward, the Swiss GDP Annualized for the Q3, expected to ease to 1.0% YoY versus 2.8% prior, could direct USD/CHF traders ahead of the US Confederation Board’s (CB) Consumer Confidence for November. Though, Wednesday’s speech from Fed Chair Jerome Powell and Friday’s US jobs report will be crucial for clear directions.

Technical analysis

Unless successfully crossing the 200-DMA hurdle, currently around 0.9640 by the press time, USD/CHF remains vulnerable to refreshing the monthly low, near 0.9355 at the latest.