USD/CHF touches fresh weekly high above 0.8900
- Broad-based USD strength is driving USD/CHF higher on Monday.
- Renewed coronavirus concerns trigger a flight to safety at the start of the week.
- US Dollar Index is posting strong daily gains, closes in on 91.00.
After posting its lowest weekly close in nearly five years at 0.8932, the USD/CHF pair staged an impressive rebound on Monday and climbed to fresh weekly tops. As of writing, the pair was up 0.83% on a daily basis at 0.8905.
DXY surges amid risk aversion
The broad-based USD strength seems to be fueling USD/CHF's rally at the start of the week. The lack of progress in EU-UK trade negotiations and concerns over the new string of coronavirus forcing countries to take strict lockdown measures weigh on market sentiment.
Reflecting the intense flight to safety, major European equity indexes are down between 2.7% and 3.7% on the day. Moreover, the S&P 500 Futures are losing 2%, suggesting that Wall Street's main indexes are likely to start the day deep in the negative territory.
The greenback is capitalizing on safe-haven flows. The US Dollar Index (DXY), which declined by 0.7% last week, is already up 1% on a daily basis near 91.00.
The only data featured in the US economic docket will be the Federal Reserve Bank of Chicago's National Activity Index. Investors are likely to remain focused on risk perception and a heavy selloff in US stocks could provide an additional boost to the USD in the second half of the day and allow USD/CHF to preserve its bullish momentum.
Technical levels to watch for