USD/CHF renews six-week top around 0.9300, Ukraine-Russia news, US data in focus
- USD/CHF grinds higher around multi-day top, recently picking up bids.
- Escalating geopolitical concerns surrounding Ukraine, Russia underpins US dollar’s safe-haven demand.
- 40-year high US inflation adds to the bullish bias ahead of next week’s key Fed meeting.
- US Michigan Consumer Sentiment Index will decorate calendar but major attention should be given to risk catalysts for clear direction.
USD/CHF bulls keep reins above 0.9300, refreshing the highest levels since late January ahead of Friday’s European session.
In doing so, the Swiss currency (CHF) pair is also up for positing the biggest weekly jump in six weeks amid the market’s rush towards the US dollar in search of risk-safety.
Other than the safe-haven demand, the US dollar also cheered upbeat inflation data ahead of next week’s crucial Federal Reserve (Fed) meeting. That said, the US Consumer Price Index (CPI) refreshed its 40-year high while matching the 7.9% YoY forecast for February the previous day. Following that, the CME’s FedWatch Tool flashed 94% probabilities of 50 basis points of a rate hike in March.
It’s worth noting that the Russia-Ukraine war angst and the market’s inflation fears are likely the main catalysts behind the market’s latest risk-off mood.
Failures of peace talks and Moscow’s invasion of Kyiv might have recently pushed the US to revoke Russia’s preferred trade partner status. The Biden administration also eyes to discuss the same with the Group of Seven (G7) to increase hardships for Mr. Putin.
Elsewhere, UK Defense Ministry recently mentioned, “Russia likely seeking to reset, re-posture forces for renewed offensive activity in coming days.” Earlier in the day, Moscow’s military hit far West of Ukraine and Kharkiv institute that contains an experimental nuclear reactor.
Against this backdrop, stock futures in the US and Europe struggle for clear direction while the US 10-year Treasury yields drop 3.3 basis points (bps) to 1.976% by the press time. Further, the US Dollar Index (DXY) remains indecisive around 98.50 but seems determined to extend the previous four-week uptrend.
Looking forward, the US Michigan Consumer Sentiment Index for March, expected 61.3 versus 62.8, will decorate the calendar and offer additional details on the US inflation, which will be helpful to forecast next week’s Fed moves. However, major attention will be given to the Russia-Ukraine headlines as Moscow has called for an emergency United Nations (UN) Security Council meeting to discuss the usage of chemical or biological weapons in the Ukraine war.
Read: Russia and Ukraine held talks, next week’s US Fed meeting in focus
Technical analysis
Although 10-DMA puts a floor under the short-term USD/CHF moves around 0.9255, a downward sloping resistance line from late November 2021, close to 0.9325, will be a tough nut to crack for the pair buyers.