Swiss franc on the defensive today
The weakness in the Swiss franc is a notable feature in the FX market today despite the overall cautious tone. I look to rising US rates as a factor creating an incentive to switch from francs to dollars.
Technically, the move comes after a week of uncertain movement around 1.1740 in EUR/CHF.
Another interesting chart is USD/CHF, which is threatening the top side of a consolidation pattern that's been in place for more than a year. If it were to run, we could see 0.9400 in short order.
I think the greenlight for this trade would be if we started to see a plateau in US covid cases or a quick turn lower. Barring that, we'll need to wait and see what Powell has to say at Jackson Hole from Aug 26-28.
