USD/CHF declines as safe-haven flows favor the Swiss Franc amid global economic uncertainty.
The PBOC cut the one-year MLF rate to 2.30% from 2.50% on Thursday.
The US Dollar may struggle due to a decline in Treasury yields.
USD/CHF extends its losses for the second consecutive day, trading around 0.8810 during the Asian early European session on Thursday. The Swiss Franc (CHF) gains ground due to safe-haven flows amid uncertainty regarding the global economy.
Negative sentiment in global stock markets affects risk assets, which drives the investors toward safe-haven Swiss Franc. US stock indices have decreased as technology stocks suffered more losses, exacerbated by disappointing quarterly earnings from major US tech companies Tesla and Alphabet. Additionally, Japanese shares hit five-week lows as the decline in technology stocks intensified.
Additionally, concerns about the weak Chinese economy were heightened by an unexpected rate cut from the People's Bank of China (PBoC) on Monday. The People’s Bank of China (PBOC), cut the one-year Medium-term Lending Facility (MLF) rate from 2.50% to 2.30% on Thursday. Moreover, the Bank of China, one of the world's largest banks, announced a 10-20 basis points cut in time deposit rates.
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