USD/CHF oscillated in a range below 0.8900 mark through the early European session. The upbeat market mood undermined the safe-haven CHF and extended some support. Retreating US bond yields kept the USD bulls on the defensive and capped the upside.
The USD/CHF pair struggled for a firm intraday direction and remained confined in a narrow trading band, below the 0.8900 mark through the early European session.
A combination of diverging forces failed to provide any meaningful impetus to the major, rather led to a subdued/range-bound price action on Thursday. The downside remains cushioned amid the prevalent risk-on environment, which tends to undermine demand for the safe-haven Swiss franc.
The market has been pricing in the prospects for more aggressive fiscal spending in 2021 under Joe Biden's presidency. The bets increased further after Biden pitched a plan to pump $1.9 trillion into the struggling US economy during his first hours as the new US President on Wednesday.
This comes amid the optimism over the rollout of vaccines for the highly contagious coronavirus disease and fueled hopes for a strong economic recovery. This, in turn, continued boosting investors' confidence and remained supportive of the ongoing rally across the global equity markets.
On the other hand, the US dollar remained depressed for the fourth consecutive session and was further pressured by a weaker tone around the US Treasury bond yields. This was seen as one of the key factors that capped gains and held the USD/CHF pair well within the previous day's trading range.
Market participants now look forward to the US macro data in order to grab some short-term trading opportunities. Thursday's US economic docket features the release of Philly Fed Manufacturing Index, Initial Weekly Jobless Claims and housing market data – Building Permits and Housing Starts.
