The Dollar bounced into Asian trading but it wasn't until the European entrance to the fray that the USD/CHF move higher accelerated. Spot broke into the 1.21's but US investment house offers into 1.2105/10 looked to cap. The pair consolidated as Swiss numbers were digested but the move higher soon continued as the French buyer returned.
Offers into 1.2130 are now being tested with a break above 1.2135 seen as a key topside intraday trigger. Swiss 4Q industrial production rose 8.9% on the year, with orders up 10.1% on year while elsewhere, risk aversion continues to decline. The UBS Risk Aversion Index fell to +0.11, from +0.22 seen into the tail-end of last week. Looking ahead, declining risk aversion has boosted the Dollar slightly into the new week but event-risk on the horizon could keep the US unit from strengthening further.
The FOMC meeting this week should constrain the Dollar but US rates are unlikely to finish the week any different from where they opened. Intraday and the focus is on the 16:00 GMT Chicago Fed Manf. Index (January) followed by the 17:00 GMT release of the NAHB Index (March).
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