USD/CHF drops to fresh weekly lows below 0.8930 as USD selloff continues

• USD/CHF is falling for the third straight day on Tuesday.
• US Dollar Index extends daily slide to 90.50 area. 
• Focus shifts to January inflation data from the US.

After spending the first half of the day in a tight range around 0.8970, the USD/CHF pair came under renewed bearish pressure during the American session and dropped to its lowest level in a week at 0.8925. As of writing, the pair was down 0.62% on a daily basis at 0.8930.

DXY remains on the backfoot

The USD's market valuation remains the primary driver of USD/CHF's movements on Tuesday. Pressured by the sharp drop seen in the US Treasury bond yields, the US Dollar Index continued to push lower and was last seen losing 0.43% on the day at 90.52.

Earlier in the day, the data from the US revealed that the NFIB Business Optimism Index edged lower in January while the JOLTS Job Openings rose to 6.6 million in December from 6.57 in November.

On Wednesday, markets will be paying close attention to the inflation report from the US. The Core Consumer Price Index is expected to edge lower to 1.5% in January and a higher-than-expected reading could help the USD regather its strength.

On the other hand, the Swiss National Bank reported last week that its FX reserves rose by 3.8 billion CHF to 896 billion CHF in January, compared to a 14.25 billion increase reported in December.

Technical levels to watch for