- USD/CHF broke out of one*week-old trading range on Monday.
- Renewed USD strength lifted USD/CHF to a fresh weekly top.
- US Dollar Index holds above 92.50 after PMI-inspired rally.
The USD/CHF pair spent the Asian session moving sideways around 0.9100 and edged lower to 0.9080 area on broad-based USD weakness during the European trading hours. With the USD staging an impressive rebound in the second half of the day, the pair reversed its direction and touched a fresh weekly high of 0.9148. As of writing, USD/CHF was up 0.2% on the day at 0.9126.
Upbeat PMI data support USD on Monday
Coronavirus vaccine optimism provided a boost to market sentiment on Monday and made it difficult for the greenback to find demand. However, the impressive PMI data from the US and surging Treasury bond yields allowed the USD to outperform its rivals.
The IHS Markit’s preliminary Services PMI and Manufacturing PMI climbed to 57.7 and 56.7 in November, respectively, to show that the economic activity in the private sector continued to grow at a strong pace. The 10-year US Treasury bond yield gained nearly 3% after the data and the US Dollar Index (DXY) jumped to a daily high of 92.80 before going into a consolidation phase. At the moment, the DXY is up 0.2% on the day at 92.53.
On Tuesday, Richmond Fed Manufacturing Index and the Conference Board’s Consumer Confidence Index will be featured in the US economic docket.
Technical levels to watch for