USD/CHF remains depressed near daily lows, just below 0.9300 mark

• A combination of factors dragged USD/CHF lower for the third straight day on Monday.
• The risk-off impulse benefitted the safe-haven CHF and exerted downward pressure.
• Hawkish Fed expectations should help limit the USD losses and lend support to the pair.

The USD/CAD pair edged lower through the early part of the European session and was last seen hovering near the lower boundary of its daily trading range, around the 0.9285 region.

A combination of factors failed to assist the USD/CHF pair to capitalize on its Friday's modest bounce of around 25 pips, instead prompted fresh selling on the first day of a new trading week. The risk-off impulse in the markets underpinned demand for the safe-haven Swiss franc. This, along with a modest US dollar weakness, dragged the pair lower for the third successive day.

Worries that China Evergrande Group's debt crisis could spread to the entire property sector in the world's second-largest economy tempered investors' appetite for perceived riskier assets. This was evident from a generally weaker tone around the equity markets, extended some support to traditional safe-haven currencies and acted as a headwind for the USD/CHF pair.

On the other hand, the USD extended last week's retracement slide from the highest level since September 2020 and remained depressed through the first half of the trading action on Monday. This was seen as another factor that exerted some pressure on the USD/CHF pair. That said, prospects for an early policy tightening by the Fed should help limit the USD losses.

Investors seem convinced that the Fed would begin rolling back its massive pandemic-era stimulus as soon as November. The market also seems to have started pricing in the possibility of a Fed interest rate hike in 2022. This, along with a fresh leg up in the US Treasury bond yields, should assist the USD to attract some dip-buying and lend support to the USD/CHF pair.

There isn't any major market-moving economic data due for release from the US on Monday. Hence, the US bond yields will play a key role in influencing the USD price dynamics. Traders might further take cues from the broader market risk sentiment to grab some short-term opportunities around the USD/CHF pair.

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