- US Dollar Index recovers above 96.70 on Thursday.
- Markets remain risk-averse with European equity indexes falling sharply.
- Coming up: Weekly Jobless Claims and PPI data from US.
The USD/CHF pair dropped to 0.9320 earlier in the day as the risk-off environment allowed the CHF to gather strength as a safe-haven. However, with the greenback extending its recovery during the European trading hours, the pair reversed its direction and erased its daily losses. As of writing, the pair was virtually unchanged on the day at 0.9390.
Risk aversion remains aas the main market theme
Despite the fact that the Trump administration failed to deliver the highly-anticipated economic response package to the coronavirus outbreak, the US Dollar Index (DXY) gained traction on Wednesday as the USD seems to be finding demand as a safer alternative. Additionally, investors may be looking to stay away from the CHF amid speculations over the SNB intervening in the FX market.
Reflecting the dismal market mood, major European equity indexes are erasing more than 5% on Thursday and the 10-year US Treasury bond yield is down nearly 20%. On the other hand, the DXY is up 0.18% on the day at 96.78.
Later in the day, the Producer Price Index (PPI) and the weekly Initial Jobless Claims from the US will be looked upon for fresh impetus. More importantly, investors will be keeping a close eye on the European Central Bank’s (ECB) monetary policy decisions and the USD’s reaction.
Technical levels to watch for
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