USD/CHF consolidates below the parity mark, moves little post-Swiss GDP
- USD/CHF failed to capitalize on the overnight positive move.
- US-China tensions over Hong Kong bills exerted some pressure.
- Better-than-expected Swiss GDP did little to influence the pair.
The USD/CHF pair lacked any firm directional bias on Thursday and remained confined in a narrow trading band, below the parity mark post-Swiss GDP figures.
The pair failed to capitalize on the previous session's goodish positive move to near two-month tops and witnessed a modest pullback during the Asian session on Thursday. The latest optimism over US-China trade talks faded rather quickly after the US President Donald Trump signed two bills supporting Hong Kong’s pro-democracy demonstrators.
Fresh tensions between the world's two largest economies weighed on the global risk sentiment. The same was evident from a softer tone surrounding equity markets, which underpinned the Swiss franc's (CHF) perceived safe-haven status and turned out to be one of the key factors that exerted some downward pressure on the major.
Meanwhile, the CHF bulls seemed rather unimpressed by the latest Swiss GDP report, which showed that the economy expanded by 0.4% during the July-September quarter as against 0.2% expected. Adding to this, the yearly growth rate stood at 1.1% as compared to 0.2% previous and consensus estimates pointing to a 0.8% rise.
Given a muted market reaction, the downside is likely to remain limited, at least for the time being. Market participants might also be reluctant to place any aggressive bets amid relatively thin liquidity conditions on the back of Thanksgiving Day holiday in the United States.
Technical levels to watch