USD/CHF struggles to find direction, trades in tight range near 0.9030
- USD/CHF fluctuates in a narrow band after last week's slump.
- Wall Street's main indexes look to open in the positive territory.
- US Dollar Index struggles to recover last week's losses.
The USD/CHF pair lost 80 pips and registered its lowest weekly close since early 2015 at 0.9038 last week. In the absence of significant fundamental drivers, the pair started the week in a calm manner and was last seen trading with modest daily losses near 0.9030.
Fed's policy shift continues to weigh on USD
The USD selloff that was triggered following FOMC Chairman Jerome Powell's remarks at the Jackson Hole Symposium caused USD/CHF to push lower in the second half of the previous week. Powell announced that the Fed will target average inflation as its new strategy and noted that they will prioritize employment over inflation.
The US Dollar Index (DXY), which tracks the USD's performance against a basket of six major currencies, lost nearly 1% last week and continues to have a tough time reversing its direction.
Ahead of Federal Reserve Vice Chairman Richard Clarida's speech and the Dallas Fed's Manufacturing Business Index data, the DXY is down 0.09% on the day at 92.22.
Meanwhile, Wall Street's main indexes remain on track to open in the positive territory with S&P 500 futures gaining 0.3% on the day. If the market mood remains upbeat in the second half of the day, USD/CHF's downside might remain limited with the CHF struggling to find demand as a safe-haven.
Technical levels to watch for