USD/CHF Benefits From Improved Market Sentiment

The USD/CHF pair is still upward biased, but in the short-term might aim towards 0.9600. the improved market sentiment dented demand for the US dollar, and constitutes a remarkable headwind for the asset.

The USD/CHF slides for the second day in four retreats below 0.9700, amidst an improved market mood weighing on the US dollar after the ECB delivered its first rate hike in 11 years, which initially sent the USD/CHF towards its daily low at 0.9667. Nevertheless, buyers stepped in and saw it as an opportunity for a better entry price. At the time of writing, the USD/CHF is trading at 0.9694.

Market sentiment has shifted into positive as reflected by the price action of the US equities, seen rising. Nonetheless, it remains fragile, with high global inflation, worldwide economic slowdown, and a US recession looming. Efforts of global central banks to tighten monetary conditions would likely end with a worldwide recession.

On Thursday, the USD/CHF began trading around 0.9700 but climbed as the mood shifted sour, hitting a daily high at 0.9739. However, earlier gains were retraced on the ECB’s decision.