“¢ The global flight to safety underpins CHF and exerts some downward pressure.
“¢ A modest USD uptick helped limit deeper losses, at least for the time being.
The USD/CHF pair maintained its offered tone through the mid-European session on Wednesday, albeit now seems to have found some support near mid-1.0000s.
The pair stalled its recent recovery move from multi-week lows and for now, seems to have snapped two consecutive days of winning streak amid a fresh wave of global risk-aversion trade, which tends to underpin the Swiss Franc’s relative safe-haven status.
In what could further escalate trade tensions between the world’s two largest economies, media reports suggested that China is preparing to use rare earths to strike back at the US. This comes after the US President Donald Trump’s comments on Monday, saying that he was not reading to make a deal.
The latest developments fueled speculations about a full-blown US-China trade war and triggered a fresh wave of global risk-aversion trade, prompting investors to seek refuge in traditional safe haven currencies – including the Swissy, though a modest US Dollar uptick helped limit the downside.
It would now be interesting to see if the pair is able to attract any fresh buying interest or the current pullback marks the end of the recent corrective bounce amid the ongoing free fall in the US Treasury bond yields and absent relevant market moving US economic releases on Wednesday.
Technical levels to watch
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