UBS recommended investors sell the pair, indicating attractive entry levels for trading. The company confirmed that the DXY index, which measures the strength of the US dollar against a basket of currencies, fell 1.5% from its peak in late April due to disappointing US economic data.
Despite the Federal Reserve's hawkish stance, with officials indicating it will take several months of moderate data before a rate cut is considered, the US dollar is facing conflicting pressures.
On the one hand, the Federal Reserve maintains a hawkish stance on monetary policy, while on the other hand, economic indicators in the United States show signs of deterioration.
UBS stressed a cautious approach and advised to be selective in conducting directional trades with the dollar. This strategy is consistent with the current economic climate, where mixed signals are emerging from policymakers and economic data.
In addition to advising a short position on USD/CHF, UBS also reported closing its long position on , albeit with a marginal gain. This move reflects their response to evolving market conditions and their ongoing assessment of currency valuations.
This article was created with the power of artificial intelligence and reviewed by an editor. For more information, see our terms and conditions.
