During the first part of Thursday’s European session, the USD/CHF pair falls to a new low for the last three and a half weeks. Despite this, the pair can find some support at lower levels. The spot prices have already recovered to the vicinity of 0.9600; nevertheless, the attempted recovery lacked the bullish confidence to make it successful.

As investors look beyond a Federal Open Market Committee that was less hawkish, the US dollar is staging a decent comeback from its lowest level since July 6, reached earlier this Thursday. This is happening in conjunction with a goodish uptick in the rates on US Treasury bonds. The fact that this is turning out to be an essential aspect that lends some support to the USD/CHF pair is quite encouraging.

On Wednesday, Federal Reserve Chair Jerome Powell eased concerns of a more aggressive policy tightening. On the other hand, the financial markets seem to have concluded that the Federal Reserve will need to raise interest rates by 50 basis points (bps) at each meeting it holds for the remainder of this year. This, in turn, is providing a boost to the yields on US bonds.

On the other hand, the upward rise that occurred overnight in the US equities markets seems to be losing steam pretty fast in the face of mounting concerns about a slowdown in the global economy. Because of this, the safe-haven Swiss franc receives some support, and any significant rise for the USD/CHF pair may be capped.

As we go ahead, all eyes will be on the publication of the advance report on GDP for the second quarter of the United States later during the early North American session. It is projected that the economy of the world’s biggest country saw growth of 0.4 percent on an annualized basis from April-June, averting a technical recession.

A figure that came in unexpectedly higher than expected would be enough to kick off a new USD surge and drive aggressive short-covering across the USD/CHF pair. In turn, this would imply that spot prices have established a near-term bottom, opening the way for any significant appreciating move in the future.