Greenback Outlook: Safe-Haven Flows Boost Swiss Franc as US Dollar Index Faces Downside Pressure
Updated Updated Tue, 2025 June 3 07:58
The US Dollar index experienced renewed pressure during the Asian session today, with the price falling to $99.92 after the Fed officials remarks on economic concerns and business sentiment.
Fed official Mary C. Daly and Cleveland Fed President Beth Hammack stated growing concerns about the US economy. While key economic indicators remain robust, both officials pointed to deteriorating business and consumer confidence, attributing part of the sentiment shift to US trade policy.
Meanwhile, no Fed official agreed to ease tightening amid an ongoing economic slowdown in the US.
US Dollar Extends Losses Amid Fed Caution and Moody’s Downgrade Pressure
The US Dollar continues its downward slide for a third consecutive session during Asian trading, weighed down by cautious remarks from Federal Reserve officials regarding the economic outlook and deteriorating business sentiment. This comes on the heels of Moody’s downgrade, which may have weighed on investor sentiment.
Technically, the US Dollar Index (DXY) has broken below the psychologically significant $100 level, slipping as low as $99.50, with technical indicators showing signs of downward pressure. The index has already retested the $100 level, but unless buyers reclaim this key threshold, further downside pressure is likely. The next major support to watch lies around the long-term trendline near $95.05, which some technical traders may view as a key support area if selling continues.
USD/CHF Slips as Swiss Franc Strengthens on Risk-Off Sentiment
With the US Dollar under sustained pressure, safe-haven currencies like the Swiss Franc have seen renewed demand. USD/CHF has broken below its April low, which aligns with the current bearish technical outlook amid ongoing geopolitical tensions and risk assets struggle to find footing. In such an environment, the Swiss Franc typically benefits from safe-haven flows, which may contribute to further downward pressure on the pair.
From a technical perspective, USD/CHF has broken below the ascending trendline that originated from April’s lows. After slicing through minor support at 0.8272, the next key level to watch is 0.8185. A break below this zone could prompt a move toward the April swing low at 0.8039, according to some technical analysis perspectives. With momentum indicators tilting lower, technical indicators currently suggest prevailing bearish momentum. The pair may remain under pressure, with some traders potentially viewing short-term rallies as an opportunity to reassess the trend.
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