USD/CHF aims to surpass 0.8970 as US debt-ceiling talks end without constructive outcome
- USD/CHF is looking to stretch its upside move above 0.8970 amid a cautious market mood.
- The US debt-ceiling issues are expected to get a constructive outcome by the end of the week.
- Fed Barkin has opened room for more rate hikes while the street is anticipating a steady interest rate policy ahead.
The USD/CHF pair is looking to stretch its recovery above the immediate resistance of 0.8970 in the Asian session. The Swiss franc asset has rebounded firmly as the US debt-ceiling negotiations for raising the same to avoid the situation of default in augmenting obligated payments by the US treasury have been postponed.
S&P500 futures have added significant gains in early Asia after a bearish Tuesday. Market sentiment is still quite nervous as an absence of a constructive outcome from US debt-ceiling talks has pushed the United States economy further towards recession.
The White House and Republican leaders have admitted that a default that contains approval of a higher borrowing limit without cutting spending cannot be approved. Also, Reuters reported that the meeting ended on an upbeat and unexpected note as McCarthy, coming out of the meeting with Biden and other congressional leaders, said, "It is possible to get a deal by the end of the week."
The US Dollar Index (DXY) has sensed pressure in extending its recovery above 102.70, however, the upside seems favored after commentary from Federal Reserve (Fed) policymakers. Richmond Fed Bank President Thomas Barkin, cited on Tuesday that he would be comfortable with more interest rate hikes if needed to bring inflation down. The commentary from Fed Barkin has opened room for more rate hikes while the street is anticipating a steady interest rate policy ahead.
Meanwhile, markets in the Swiss economy will remain closed on Wednesday on account of Ascension Day.
Author
Sagar Dua
FXStreet
Sagar Dua is associated with the financial markets from his college days. Along with pursuing post-graduation in Commerce in 2014, he started his markets training with chart analysis.
