USD/CHF inches closer to 0.99 as greenback preserves strength

• 10-year US T-bond yield gains more than 2% on Monday.
• US Dollar Index climbs higher toward the 97 mark.
• Manufacturing sector in the U.S. shows signs of life in June.

Boosted by improved market sentiment and the broad-based USD strength, the USD/CHF pair gained traction and climbed higher toward the 0.99 mark. As of writing, the pair was trading at 0.9876, adding 1.2% on a daily basis.

Following his meeting with Chinese President Xi at the G20 summit, U.S. President Trump on Saturday announced that they have suspended tariffs on Chinese imports to restart trade negotiations and said that China will start buying farm products from the U.S. As expected, markets cheered this development and the risk-on environment made it difficult for safe-havens such as the CHF find demand.

Later in the day, the US Dollar Index, which gained traction on the back of a more than 2% increase in the 10-year Treasury bond yield, extended its rally in the second half of the day to give the pair an additional boost.  The upbeat PMI data from the U.S. also supported the DXY's upsurge.

The IHS Markit's Manufacturing PMI improved to 50.6 in June from 50.5 in May and the ISM's Manufacturing PMI came in at 51.7 to beat the market expectation of 51. The US Dollar Index was last seen trading at 96.83, up 0.73% on the day.

Technical levels to watch for