USD/CHF extends reversal from weekly highs after Fed’s meeting, drops to 1-week lows
- Dollar drops across the board after FOMC meeting, recovers only modestly during last hour.
- USD/CHF suffers worst decline since June 3, heads for lowest close in a week.
The USD/CHF pair fell from 0.9955 to 0.9914, hitting a 1-week low weakened by the slide of the greenback across the board. The dovish tone from the Fed triggered the decline that extended US dollar losses.
From the lows, the pair rebounded, and as of writing it is trading at 0.9935/40, far from the lows but 60 pips below yesterday’s close. The move lower represents a short-term reversal from the 2-week high it hit earlier today at 1.0013. Today it broke an uptrend line, and it is also consolidating below 0.9960 that capped the downside during the previous days. The outlook now is biased to the downside and could be reinforced if it drops and holds under 0.9925.
The greenback weakened after the “dovish” FOMC statement. According to ING analysts, the Fed opened the door to rate cuts, but they warn it may not be as aggressive as the market expects. That would help explain why the US Dollar dropped but only modestly. “For now, we're sticking to our recently revised forecast for rate cuts in September and December, but if the data deteriorates and President Trump and President Xi's meeting next week goes badly, we're open to moving that to July and September,” analysts added.
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