USD/CHF pares majority of early gains, struggles to hold above 0.9100

• USD/CHF lost its traction after climbing above 0.9130.
• US Dollar Index holds above 93.00 after US data.
• Wall Street's main indexes trade in the negative territory.

The USD/CHF pair rose to its highest level in more than two weeks at 0.9139 on the back of broad-based USD strength on Thursday but lost its traction during the American session. As of writing, the pair was up 0.05% on a daily basis at 0.9097.

DXY fails to build on FOMC-inspired gains

In its updated Economic Projections on Wednesday, the Federal Reserve said that it expects the economy to contract at a softer pace than June's forecast of 6.5% in 2020. During the press conference, FOMC Chairman Jerome Powell acknowledged that the economy has recovered faster than expected in the last 60 days.

The relatively optimistic tone provided a boost to the USD on Wednesday and the US Dollar Index (DXY) rose to its best level since September 9th at 93.59 during the early trading hours of the Asian session on Thursday.

However, a sharp drop witnessed in the US Treasury bond yields made it difficult for the DXY to push higher in the second half of the day. At the moment, the 10-year US T-bond yield is down nearly 5% on the day and the DXY is clinging to small gains at 93.15.

Meanwhile, the risk-averse market environment, as confirmed by the poor performance of major equity indexes in the US, seems to be helping the CHF stay resilient against its rivals as a safe-haven.

Earlier in the day, the data from the US showed that the Initial Jobless Claims declined by 33,000 to 860,000 last week but was largely ignored by the market participants.

Technical levels to watch for