The US dollar continues to power higher against the Swiss franc, as we are likely to see a bit of carry trade and swap collecting that traders like in this market.
The U.S. dollar continues to see buyers jumping into this market every time it drops. As the interest rate differential continues to favor the U.S. dollar over the Swiss franc, it is probably worth noting that we are now threatening the 0.83 level.
Top Regulated Brokers
The 0.83 level is a large, round, psychologically significant figure, and we did, just a couple of days ago, pull back to test the 0.82 level, an area that previously had been resistant. The market testing that should bring a little bit of market memory into the picture.
Positive Swap Supports Long USD/CHF Positions
You get paid at the end of every day to trade and hold this position to the long side, and that is definitely becoming more and more of a factor here as those rates rise. Until that rising interest rate differential and momentum subside, this is a pair that should continue to favor the U.S. dollar against the Swiss Franc.
The Swiss National Bank is hell-bent on staying at 0%, so it makes quite a bit of sense that you would see this as positive. The Swiss franc is losing ground in general against multiple currencies, not just the U.S. dollar.
So ultimately, any time it drops, I think it gives an opportunity for traders to come in and join what has been a very long-term move that I think probably still has legs. This is a trade that I have liked for sometime now, as we are looking likely to see a lot of “FOMO” trading, and attention paid to the SNB and interest rates.
Ready to trade our daily forex forecast? Here are the best online trading platforms in Switzerland to choose from.