The US dollar continues to experience selling pressure during Asia-Pacific trading hours. The currency is down by 10-20 pips across various forex pairs.
A notable example is the decline in USD/CHF, which has reached its lowest point in a decade. Observers may want to focus on this pair as it consolidates after its recent fall.
Current Momentum and Market Expectations
This recent drop in the greenback, particularly against the franc, reflects a broader shift in market expectations around policy divergence and safe-haven attractiveness. With USD/CHF now sitting at levels unseen in ten years, traders have started to take profits or adjust positioning, which often happens after sharp moves. The pair has struggled to find footing after breaching long-standing technical levels, suggesting that many market participants have reassessed the strength of this pair in the short-to-medium term.
When we observe patterns like this—especially following a steep single-direction move—it usually points to falling momentum and the market gearing up for a consolidation phase, or possibly a smaller counter-trend recovery. It’s not the move itself, but the reaction afterwards that can be telling. We’ve seen in past cycles how the dollar reacts when both policy expectations and positioning lean too heavily in one direction.
Meanwhile, volatility in other dollar pairs may stay elevated, particularly if traders widen their focus beyond USD/CHF and begin rotating into other positions. Short-term price shifts tend to attract fast money, and the recent declines may have drawn in event-driven players looking to take advantage of stretched intraday ranges. That said, it remains important to track whether these moves are liquidity-driven or backed by clearer macro catalysts.
Factors Influencing Dollar Movements
Powell’s comments earlier this week added weight to the dovish shift in rate expectations, and that alone explains part of the dollar’s softness. Still, what we find more pressing is how futures markets had already adjusted deeply before the remarks, implying that pricing had front-run the narrative. That tells us current dollar weakness may carry less predictive power than usual, especially if it’s being fuelled by positioning rather than strong conviction.
On the technical front, USD/CHF offers clues. After such a sharp decline, price action has started to compress within a tighter range during overlapping sessions— a classic pattern before either a breakout or a failed retest. The 0.8850-0.8870 band has begun acting as near-term resistance, while intra-day buyers appear hesitant to commit below 0.8800 without firmer support glimpses ahead.
The best course in these weeks ahead would be to adjust entry timing and limit exposure during periods of low participation, especially around Tokyo lunch and late New York hours. Larger directional moves seem increasingly bounded by policy expectations, so any softness in the dollar might be checked either by event risk or renewed geopolitical tension.
Also worth noting—Swiss franc strength has not occurred in isolation. Broad flows into funding currencies over the past five sessions suggest a wider aversion to riskier positioning. Euro, yen, and even some EM crosses have started to reflect that bias. The orderbook has also shown thin liquidity patches in early Asia, which increases the likelihood of price spikes rather than sustained moves.
We continue to watch how option markets shift implied vols and skew. Back-end puts on dollar pairs have risen in cost noticeably—particularly in USD/CHF—which implies longer-term bearish sentiment isn’t quite exhausted, despite the short-term oversold look.
Given all this, tactical decisions should be less about direction, and more about sizing and timing. Pay strong attention to whether liquidity conditions allow favourable exits. We’ve learned that asymmetry in risk often shows up not when things are chaotic, but when things appear too quiet.
