The pullback from just shy of 1.2960 in EUR/USD has added bite to the USD/CHF bounce. However, the 1.2450/55 area has been fortified by fresh sellers, as the pressure is seen remaining on the downside sub-1.2450, so London dealers expect to see stalling around this level into early North American trading.
Elsewhere, EUR/CHF continues its slow depreciation back towards the 1.6100 area.Short-term accounts have used the recent break below 1.6120 as a signal that a return to 1.6060 could be on the cards and the running of the stops tight below has only served to aid their cause.Domestic dealers still look to Swiss data.
Swiss CPI is due on Thursday (06:45 GMT) and economists now look for a January reading of -0.3% on month with +0.5% eyed on the year. A monthly decline into the New Year will confirm the current picture of a benign inflation outlook but will not dampen the prospect of further SNB rate hikes in Q1 & Q2.
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