The USD has been resilient recently, with the CHF to USD rate showing bullish trends in the past two weeks and surpassing 0.90. Initially, the US dollar dropped after a disappointing ISM manufacturing index report but quickly rebounded. The bond market is driving this recovery, with 10-year Treasury yields increasing by 12 basis points in a day and more than 20 basis points from Friday’s post-PCE lows.
The USD/CHF has reached a new one-month high, gaining 40 pips to break above 0.90 for the first time since late May. The 50 SMA (yellow) has been breached, indicating the end of the bearish trend. Meanwhile, the recent gains in commodity currencies are fading, partly due to a stock market that has not performed as strongly as expected.
The S&P PMI experienced a slight decline in June, reaching its lowest point since February. Although the US dollar initially dropped after the news, it has since rebounded, possibly driven by an increase in new orders. The restaurant sector is being closely monitored for any signs of weakening customer demand, especially after McDonald’s issued a warning last month. Housing remains a significant drag, as indicated by some of the earlier mentioned comments.