USD/CHF Makes A New Weekly High Amid USD Strength And Credit Suisse Trouble
The USD/CHF remained offered during the European session and made a new weekly high. Currently, the pair is trading in the mid of 0.9200s with a bullish bias.
The recent upside in the USD/CHF has little to do with the USD and more to do with Credit Suisse. The swiss based lender has come under trouble after one of its major shareholders backed out from investing in the company.
In addition, the Swiss National Bank has also opted to stay quiet about the current situation. This led to speculations about the potential default of Credit Suisse.
Global Equity Market's Selloff Favors US Dollar
The Credit Suisse issue led to a major sell-off in the global equity markets. This favors the US Dollar since it is a global reserve currency and holds a safe-haven status.
Similarly, the CHF is also under pressure as Credit Suisse is based in Switzerland. Being one of the major lenders in Europe, it would deal a serious blow to the CHF if Credit Suisse defaults.
For now, the market is now looking at the economic data releases from the USA. The first item on the list is the PPI, followed by the Empire State Manufacturing Index and retail sales.
These data releases will offer a fresh outlook on the US economy and thus will also affect the US Dollar. However, the elephant in the room is the banking crisis in both the USA and Europe.
We have already seen two banks go down in the USA, and now it seems that a major lender will also go bankrupt in Europe.
Although both the Switzerland and USA are facing banking crisis, it appears that the situation is more grave for Switzerland than the USA. At least, that's what the market is showing through the USD/CHF and other USD pairs.