USD/CHF drops below 0.9800 as USD selloff continues
- Fed announces open-ended QE to support US economy.
- US Dollar Index slumps below 102 in early American session.
- Chicago Fed's National Activity Index improves to 0.16 in February.
The USD/CHF pair climbed higher toward the 0.9900 handle during the European trading hours but lost its traction in the second half of the day following the Fed's announcement of aggressive policy measures. As of writing, the pair was trading at 0.9798, erasing 0.66% on the day.
Fed keeps USD's gains in check
To eliminate disruptions to the economic activity and support companies, household and businesses, the Fed has started an open-ended QE program and said that it will purchase treasuries and mortgage-backed securities in the amounts needed to ensure smooth market functioning.
The US Dollar Index, which climbed to fresh multi-year highs near the 103 handle on Monday, made a sharp U-turn on the Fed's announcement and was last seen erasing 0.15% on the day at 101.79.
Meanwhile, the only data from the US showed that the Federal Reserve Bank of Chicago's National Activity Index rose to 0.16 in February from -0.33 but was largely ignored by the participants.
On the other hand, Wall Street opened the day sharply lower to suggest that investors are not yet ready to move away from safe-haven assets and put additional weight on the pair's shoulders.
Technical levels to watch for