The USD/CHF pair attracts some dip-buying on Thursday, albeit struggles to capitalize on the intraday uptick beyond the 0.9000 psychological mark. However, spot prices stick to a mildly positive bias through the early European session and remain within striking distance of a nearly five-week high touched on Wednesday.
The US Dollar (USD) edges higher for the third successive day and stands tall near its highest level since March 24, which, in turn, is seen as a critical factor acting as a tailwind for the USD/CHF pair. The recent hawkish remarks by several Federal Reserve (Fed) officials fueled speculations that the US central bank will keep interest rates higher for longer. This, along with the latest optimism that the US debt ceiling will be raised, remains supportive of elevated US Treasury bond yields and continues to underpin the Greenback.
US President Joe Biden and top congressional Republican Kevin McCarthy underscored their determination to strike a deal soon to raise the government’s $31.4 trillion debt ceiling. This, in turn, suggests that the path of least resistance for the USD/CHF pair is to the upside. Worries over slowing global growth support the safe-haven Swiss Franc (CHF) and cap any further gains. Furthermore, the lack of solid follow-through buying warrants some caution before placing new bullish bets.
Market participants now look to the US economic docket, featuring the release of the usual Weekly Initial Jobless Claims, the Philly Fed Manufacturing Index and Existing Home Sales later during the early North American session. Traders will further take cues from speeches by influential FOMC members, which will drive the USD demand along with the US bond yields. Apart from this, developments surrounding the US debt-limit negotiations and the broader risk sentiment might provide some impetus to the USD/CHF pair.
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