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  • US Dollar Index advances to the highest level in more than two years above 99.40  
  • Wall Street’s main indexes post decisive gains on Monday.
  • Disappointing data from Switzerland weighs on the CHF.

The combination of a broad USD strength, recovering market sentiment and a weakening CHF boosted the USD/CHF pair to its highest level since mid-June at 0.9988. As of writing, the pair was up 0.78% on the day at 0.9985.

The data from Switzerland on Monday showed that the KOF Leading Indicator in September dropped to 93.2 from 95.5 in August and fell short of the market expectation of 96.2 to weigh on the currency. On Tuesday, the Swiss Federal Statistical Office is expected to report a 0.3% annual contraction in retail sales.

Risk-on flows dominate the market

Meanwhile, the recovering market sentiment on hopes of the United States (USD) and China making progress in trade negotiations and avoiding a further escalation of the conflict after a US official denied reports claiming that Trump administration was planning to limit investor portfolio flows into China also weighed on the demand for traditional safe-haven assets such as the JPY, CHF and gold at the start of the week.  

Reflecting the upbeat mood, major equity indexes in Europe registered daily gains on Monday and Wall Street opened in the positive territory before stretching higher in the session. At the moment, the Nasdaq Composite is up 1% on the day while the S&P 500 is adding 0.7%.

On the other hand, the Greenback capitalized on the heavy selling pressure surrounding the EUR and the US Dollar Index climbed to its best level in more than two years at 99.46. Ahead of the Markit’s and the Institue for Supply Management’s (ISM) Purchasing Managers’ Index (PMI) data, the index remains on track to post its strongest  daily close since May of 2017.

Technical levels to watch for