- The USD/CHF continued to gain traction for the fourth consecutive session on Wednesday.
- A strong bid tone around the US dollar is seen as a key factor driving the pair up.
- Optimistic market sentiment dampened the safe-haven Swiss franc, for which it remains supportive.
The USD/CHF pair maintained its buy tone in early North American trading, last trading near the 0.9215-25 area – the highest level since August 3.
The pair built on this week’s positive momentum, gaining traction for the fourth consecutive session on Wednesday amid continued buying interest around the dollar. Concerns over renewed embargo measures continue to benefit the dollar’s status as a global reserve currency against the backdrop of rising COVID-19 cases.
In fact, the key dollar index surged to a two-month high and largely shrugged off comments made by Fed Vice Chairman Clarida. In an interview with Bloomberg TV, Clarida said that the Fed will not start thinking about raising interest rates until inflation is clearly at 2% and that additional fiscal measures are needed for the US economic recovery.
The dollar stood firm after the release of the Markit PMI flash report showed that U.S. manufacturing business activity expanded at a strong pace in September. During the reporting period, the index rose to 53.5 from 53.1 in August.Meanwhile, the services purchasing managers’ index fell below market expectations, to 54.6 from 55.
In addition to the broad-based strengthening of the dollar, a positive opening in US equities weakened the Swiss franc’s safe-haven demand and remained supportive of the dollar’s continued strength. With the latest wave of gains, the USD/CHF pair now appears to have confirmed its recent bullish breakout and appears poised to surpass the August monthly swing highs around the 0.9240 area.