USD/CHF sticks to gains just below 0.9600 mark, highest since June 2020

The pair extended its recent strong bullish momentum witnessed over the past three weeks or so and gained some follow-through traction for the third successive day on Monday. The US dollar shot to a more than two-year high, which, in turn, was seen as a key factor that acted as a tailwind for the USD/CHF pair. That said, the prevalent risk-off environment extended some support to the safe-haven Swiss franc and kept a lid on any further gains, at least for the time being.

at a faster pace to combat stubbornly high inflation. The bets were reaffirmed by Fed Chair Jerome Powell on Thursday, saying that a 50 bps rate hike will be on the table at the upcoming FOMC meeting in May. Powell also hinted at a series of rate increases this year. The markets were quick to price in jumbo rate hikes at the next four meetings, which continued underpinning the buck.

The prospects for more aggressive Fed rate hikes, along with prolonged COVID-19 lockdowns in China, raised concerns about slowing global growth. This, in turn, tempered investors' appetite for perceived riskier assets, which was evident from a generally weaker tone around the equity markets.

Nevertheless, the fundamental backdrop supports prospects for a further near-term appreciating move, suggesting that any pullback could be seen as a buying opportunity. In the absence of any major market-moving economic releases, the USD price dynamics will continue to play a key role in influencing the USD/CHF pair. Traders will further take cues from the broader market risk sentiment to grab some short-term opportunities.

Source: Digital Coin News (digitalcoinnews.net)

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