Dollar Back Under Mild Pressure as Markets Stuck in Range

While trading activities are relative subdued today so far, dollar is seen softening and is possibly back under some mild pressure. Swiss franc has been quietly firm this week and is leading the rally against dollar. Indeed, EUR/CHF is back pressing 1.205 level for the momentum and seems to be heading back to recent low at 1.2031. Aussie also pared some of this week's losses and is untroubled by the recent political turmoil in the country. Indeed, strength in commodities might help trigger some rebound in Aussie and Kiwi and possibly Loonie too. Without major focus for the day, main attention will turn to German IFO business climate in European session.

EUR/CHF's fall from 1.2127 extends further to as low as 1.2050 so far today and is possibly heading back towards 1.2031 recent low. The Swiss government said yesterday that an independent legal review of the supervision of the SNB showed the current supervisory framework is adequate. The reviewed was triggered after former president Hildebrand resigned on currency dealing scandal. The new president would possibly be named in mid-Q2 and before that, there should be any scope for rebound in EUR/CHF. However, we'd maintain that SNB remains determined to defend the 1.2 floor and any downside in EUR/CHF should be contained there.

German Ifo business climate is expected rise for the fourth month in February to 108.8, to hit a seven month high. This would be inline with Bundesbank's updated outlook that the Germany economy has "improved perceptibly". The current assessment component is expected to rise to 116.5 while expectation component is expected to improve to 102. EUR/USD is so far held below recent high of 1.3321 in spite of the conclusion of Greece's second bailout and needed some fuel to get through this resistance.

Other data to be released include UK BBA mortgage approvals, CBI trends total orders, US jobless claims and house price index.