- US Dollar Index reaches 8-week high on Wednesday.
- 10-year US Treasury bond yield erases Tuesday’s gains.
- Coming up: The IHS Markit’s preliminary Manufacturing and Services PMI reports.
After finding interim support near the 0.98 handle on Monday, the USD/CHF pair posted decisive gains on the back of broad USD strength yesterday but struggled to preserve its momentum. Following an advance to a fresh six-day high of 0.9875, the pair lost its traction and was last seen trading at 0.9852, where it was virtually unchanged the day.
The US Dollar Index, which tracks the dollar’s value against a basket of six major currencies, took advantage of the sharp rally witnessed in the Treasury bond yields yesterday but seems to be staying in a consolidation phase ahead of today’s key data from the United States. At the moment, the DXY is posting small daily losses at 97.60 and the 10-year US T-bond yield is down 0.7% on the day.
Eyes on PMI data
During the American trading hours, the IHS Markit will publish the advanced July Manufacturing and Services PMI figures, which are both expected to show slight improvements from their June levels. Better-than-expected PMI readings could help the DXY extend its rally as it would cast doubt on the expectation of the Federal Reserve adopting an aggressive dovish stance next week.
New home sales data will be featured in the US economic docket as well but is likely to be ignored by the participants.
Technical levels to watch for
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