USD/CHF struggles to stage a convincing rebound, trades below 0.8850

• USD/CHF’s downside remains limited despite broad USD weakness.
• SNB’s Jordan repeats that US report has no impact on policy.
• US Dollar Index stays deep in red below 90.00.

The USD/CHF pair edged slightly higher to 0.8850 area during the American trading hours but failed to extend its rebound. As of writing, the pair was down 0.2% on a daily basis at 0.8840.

SNB ignores US report naming Switzerland currency manipulator

Despite the heavy selling pressure surrounding the USD, the pair’s downside remains limited following Swiss National Bank Chairman Thomas Jordan’s comments on the policy outlook.

On Wednesday, the US Treasury named Switzerland a currency manipulator. The SNB quickly responded in a statement and said that the interventions in the foreign exchange market don’t give Switzerland an unfair competitive advantage. Commenting on the same issue, Jordan reiterated that the US’ report will have no impact on the SNB’s monetary policy. Meanwhile, the SNB left its policy rate unchanged at -0.75% as expected.

On the other hand, the US Dollar Index (DXY) slumped to its lowest level since April 2018 at 89.75 on Thursday and didn’t allow USD/CHF to gain traction. The risk-positive market environment on the back of US stimulus hopes and Brexit optimism alongside the US Federal’s Reserve’s commitment to extremely loose policy continued to weigh on the greenback. 

Earlier in the day, the data from the US showed that the Initial Jobless Claims rose to 885,000 last week. Nevertheless, both the Nasdaq Composite and the S&P 500 notched new record highs after the opening bell and the DXY remained deep in the negative territory.

Technical levels to watch for