USD/CHF trades modestly higher on Tuesday in the early Asian trading hours.
US 10-year benchmark Treasury yields fell sharply on concerns of potential spillover from China’s Evergrande.
Pre-Fed market volatility, sour-risk sentiment pushes safer Swiss Franc higher.
The USD/CHF pair remains muted in the initial Asian trading hours on Tuesday. After testing monthly highs above 0.9300 in the overnight session, USD/CHF retreated on a corrective pullback. At the time of writing, USD/CHF is trading at 0.9274, down 0.01% for the day.
The US 10-year benchmark yields trade near 1.31% with 0.26% gains amid concerns about China’s second-largest property developer, Evergrande default and the risk of spreading shockwaves beyond China.
The US Dollar Index (DXY), which measures the performance of the greenback against the basket of six major currencies, turns mildly negative near 93.20 with 0.02% losses.
Investors remain anxious ahead of the FOMC two-day policy meeting on Wednesday. Fed’s officials are expected to signal a start to scaling down the monthly asset purchase program.
It is worth noting that, S&P 500 Futures is trading at 4,357.33, down 1.70% losses. On the other hand, the Swiss Franc holds some ground on its safe-haven appeal amid reduced risk appetite. Furthermore, the recent foreign investment flows into Swiss stocks also kept Swiss currency on the higher side.
Meanwhile, the Swiss government has lowered the growth forecast for the economy by 3.2% this year. As per the State Secretariat for Economic Affairs (SECO) a less vigorous global recovery, supply-chain bottlenecks and tightened coronavirus measures remained the major reasons behind the pull-down in the growth projections estimates.
As for now, traders wait for the Swiss Balance of Trade, US Current Account, Housing Starts and Building Permits to gain fresh trading impetus.
USD/CHF additional levels