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As you might expect from the undeniably “risk-off” tone throughout the month of October, the “safe haven” Japanese yen was last month’s best-performing major currency. The big surprise, however, came from a different safe haven currency; the Swiss franc was the weakest major on the month, edging out the euro.

It’s been another rough day for global stock investors (see my colleague Fawad Razaqzada’s note “Global stocks extend decline as Chinese markets resume slide” for more), so it’s not surprising that the safe haven Japanese yen is once again at the top of the FX relative performance charts. What is interesting is the price action in the US dollar, whi...

Political headlines and trade fears are dominating the headlines in today’s North American session, leading to a slight risk-off tone despite a positive open for risk assets. As a result, we’ve seen the US dollar, Japanese yen, and Swiss franc ascend to become the strongest major currencies on the day after bringing up the rear through the first fou...

A full six weeks ago, we highlighted how the combination of a bearish candlestick formation and a clear divergence in the RSI indicator suggested that USD/CHF could be topping (see “USD/CHF: Potential bearish reversal forming at 14-month highs” for more).

If you were just to look at the where the major currencies are trading relative to yesterday’s US close, you’d think it’s been a pretty quiet day; after all, none of the majors are trading more than 0.3% from the day’s open as of writing.

Both the US dollar and US equity markets attempted to bounce on Wednesday after consecutive down days, but were unable to fully buck the pressures imposed largely by fears of an impending global trade war.

The US dollar pulled back on Thursday after having rallied strongly for the first half of the week. Prior to this pullback, the dollar had been boosted sharply this week by rebounding US economic data and a corresponding rise in expectations for a June interest rate hike by the Federal Reserve.

While the Fed currently still stands as the only major central bank in steady tightening mode, speculation that this may change in the not-too-distant future has weighed heavily on the dollar. This speculation is reflected in the technicals for several different currency pairs, which are showing clear dollar breakdowns.

USD/CHF broke down sharply below a rising trend channel and returned to parity (1.0000) on Wednesday. This occurred after the US Federal Reserve raised interest rates by a quarter point to 0.75-1.00% but issued an unexpectedly dovish outlook, which led to a steep plunge for the US dollar.

Fed Chair Janet Yellen’s testimony before both chambers of Congress on Tuesday/Wednesday appeared to strike a slightly more hawkish tone, as Yellen stated that it would be “unwise” to delay raising interest rates further.

USD/CHF tested and then turned back down from parity (1.0000) on Wednesday as the US dollar continued to be weighed down.

Just a couple of days before Donald Trump’s inauguration as US president, the dollar is on a modest rebound but still generally under pressure amid a pullback that has been in place since the beginning of the new year. The dollar’s initial reaction to Trump’s November election was highly positive due in large part to expectations of higher US econom...