- Trading action remains subdued ahead of key events.
- US Dollar Index moves sideways in a narrow band below 97.50.
- Investors will look for clues on number of rate cuts in FOMC June meeting minutes.
The USD/CHF lost its traction before testing the critical parity mark earlier this week and posted small losses on Tuesday. With investors staying on the sidelines ahead of today’s crucial events, the pair edged lower toward the 0.99 mark but found support at 0.9908. As of writing, the pair was down 0.1% on the day at 0.9925.
The US Dollar Index, which capitalized on the upbeat employment figures that hurt the odds of the Fed making an aggressive rate cut in July, touched its highest level in three weeks at 97.60 yesterday and is now moving sideways in the 97.40-50 band ahead of FOMC Chairman Powell’s semi-annual monetary policy testimony before the Congress at 14 GMT.
Previewing Powell’s statement, “Our colleagues expect Powell to reiterate the relatively upbeat assessment of the labour market but if questioned more closely about the underlying details, they would not be surprised if Powell were to sound a mild note of caution about the recent downshift in hours worked,” Deutsche Bank analysts said.
Later in the day, the FOMC will release the minutes of its June meeting as well. In the second half of the day, the greenback’s reaction is likely to stay as the sole driver of the pair’s price action.
Technical levels to watch for
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