USD/CHF plummets to 0.99 as US Dollar Index extends losses

• Dismal data from the U.S. and falling T-bond yields pull the DXY lower.
• Risk aversion  boosts the demand for safe-havens.
• SNB keeps the interest rate and policy unchanged.

In the second half of the day, the greenback came under a heavy selling pressure and the US Dollar Index erased the majority of this week’s gains as it dropped below the 94.50 mark. Dragged lower by the weakening USD, the USD/CHF pair fell to a fresh weekly low 0.9897 and was last seen trading at 0.9907, where it was down 0.55% on the day.

Today’s data from the United States showed that Philly Fed Manufacturing Index dropped to 19.9 in June from 34.4 in May to fall short of the market expectation of 29. Furthermore, the 10-year US T-bond yield lost more than 1% and decreased below 2.9%  in the NA session to not allow a recovery.

Meanwhile, major equity indexes in the United States started the day on a negative note extended their losses after the U.S. Supreme Court announced its decision to allow states to require online tax collection. As of writing, the S&P 500 was down 0.55% on the day while the Dow Jones Industrial Average was losing 0.65%.

Earlier today, the Swiss National Bank (SNB) didn’t announce any changes to its monetary policy as expected. SNB  Chairman Thomas Jordan reiterated that the CHF was still highly valued and they were ready to intervene and added that the situation in the FX market was fragile.

Technical outlook

1.0000 (parity/psychological level) remains as a critical resistance on the upside ahead of 1.0055 (May 9 high) and 1.0095/1.0100 (May 10, 2017, high/psychological level). Technical supports are located at 0.9890 (20-DMA), 0.9840 (Jun. 13 low) and 0.9790 (Jun. 7 low).