USD/CHF jumps to the highest level since early August, around 0.9220-25 area
- USD/CHF continued gaining traction for the fourth consecutive session on Wednesday.
- The strong bid tone surrounding the USD was seen as a key factor driving the pair higher.
- The upbeat market mood undermined the safe-haven CHF and remained supportive.
The USD/CHF pair maintained its bid tone through the early North American session and was last seen trading near the 0.9215-25 region – the highest level since August 3rd.
The pair build on this week's positive momentum and gained traction for the fourth consecutive session on Wednesday amid sustained buying interest around the US dollar. Against the backdrop of rising COVID-19 cases, fears of renewed lockdown measures continued benefitting the greenback's status as the global reserve currency.
In fact, the key USD Index shot to two-month tops and largely shrugged off comments by the Fed Vice Chairman Richard Clarida. In an interview on Bloomberg TV, Clarida said that the Fed won’t begin to think about raising rates until inflation is clearly at 2% and that additional fiscal measures will be needed for the US recovery.
The greenback stood tall following the release of the flash version of Markit PMI prints, which showed that business activity in the US manufacturing sector expanded at a robust pace in September. The gauge rose to 53.5 during the reported month from 53.1 in August. Meanwhile, the SErvices PMI missed market expectations and edge lower to 54.6 from 55.
Apart from a broad-based USD strength, a positive opening in the US equity markets undermined the Swiss franc's safe-haven demand and remained supportive of the ongoing positive move. With the latest leg up, the USD/CHF pair now seems to have confirmed a near-term bullish breakout and seems poised to surpass August monthly swing highs, around the 0.9240 region.
Technical levels to watch