Swiss Franc retreats further, US Dollar firms up with Fed minutes in focus

USD/CHF appreciates above 0.8300 as the US Dollar appreciates across the board.
A mild risk appetite amid higher Oil prices has provided a fresh boost to the safe-haven USD.
Investors are reluctant of selling the Greenback ahead of the release of the Fed minutes.

Guillermo Alcala FXStreet

The Swiss Franc (CHF) loses ground for the third consecutive day against the US Dollar (USD) on Wednesday, retracing the rebound witnessed late last week. The USD/CHF pair has returned above 0.8300, trading at 0.8323 as of writing, amid a firmer US Dollar ahead of the release of the Federal Reserve’s (Fed) minutes, and the rebound in Oil prices.

The US central bank hiked for the first time in three years in September, as expected, and Chair Kevin Warsh surprised with an unequivocal hawkish message. Investors ramped up bets of back-to-back rate hikes following the meeting, but the soft inflation and employment reports released last week have curbed those hopes. Markets, however, remain confident that the bank will hike rates again in December and at least one more time in early 2027.

Rising Oil prices are weighing on risk appetite

Beyond that, Brent Oil prices have appreciated nearly $4 from Tuesday’s lows, hitting levels above the key $100, following news about a new wave of attacks by the Iran-backed Houthis on Saudi Arabia. Higher Oil prices pose a challenge for crude-importing countries such as Switzerland and add pressure on the Swissie.

In Switzerland, data from the Swiss National Bank released earlier in the day revealed that the country’s Foreign Currency reserves remained broadly steady at CHF 770,47 billion in September, from CHF 770 billion in August. The impact of these figures on the Swiss Franc has been minimal.

Strategists at UOB Group observe that the USD/CHF “has likely entered a range-trading phase between 0.8245 and 0.8365.” In the near term (one to three weeks), the bank expects the pair to remain confined to this broad consolidation band.

Economic Indicator

Foreign Currency Reserves

Foreign Currency Reserves are the foreign currency deposits and bonds held by Swiss National Bank and monetary authorities. It provides insight into the SNB's currency market operations, such as how actively they are defending the franc's exchange rate against the euro.

Economic Indicator

FOMC Minutes

FOMC stands for The Federal Open Market Committee that organizes 8 meetings in a year and reviews economic and financial conditions, determines the appropriate stance of monetary policy and assesses the risks to its long-run goals of price stability and sustainable economic growth. FOMC Minutes are released by the Board of Governors of the Federal Reserve and are a clear guide to the future US interest rate policy.

Why it matters to traders?

Minutes of the Federal Open Market Committee (FOMC) is usually published three weeks after the day of the policy decision. Investors look for clues regarding the policy outlook in this publication alongside the vote split. A bullish tone is likely to provide a boost to the greenback while a dovish stance is seen as USD-negative. It needs to be noted that the market reaction to FOMC Minutes could be delayed as news outlets don’t have access to the publication before the release, unlike the FOMC’s Policy Statement.

Author

Guillermo Alcala

FXStreet

Graduated in Communication Sciences at the Universidad del Pais Vasco and Universiteit van Amsterdam, Guillermo has been working as financial news editor and copywriter in diverse Forex-related firms, like FXStreet and Kantox.

AUD/USD remains depressed 0.7000, awaits FOMC Minutes

AUD/USD struggles to capitalize on its recent recovery move and trades with a negative bias below 0.7000 in Wednesday's Asian session. Amid geopolitical uncertainty, the US Dollar attracts some dip-buyers after a fresh leg up in US bond yields, keeping the pair under pressure despite hawkish RBA expectations. All eyes now remain on the FOMC Minutes.

USD/JPY holds firm near 158.50 ahead of Fed Minutes

USD/JPY hangs close to a one-and-a-half-week high near 158.50 in the Asian session on Wednesday, with bulls now awaiting a move beyond the 200-day SMA hurdle before positioning for further gains ahead of the FOMC Minutes. Meanwhile, a fresh leg up in US bond yields revives US Dollar demand amid geopolitical uncertainties, boosting the pair amid dovish BoJ commentary.

Gold retraces gains and nears two-month lows at $4,104

Gold retraces Tuesday’s gains on Wednesday and resumes its broader bearish trend, with the US Dollar appreciating across the board, as investors brace for the release of the minutes of the latest Federal Reserve meeting. The XAU/USD pair trades below $4,120 after retreating from the $4,180 area on Tuesday, drifting closer to the two-month low at $4,104.

Dogecoin extended correction and weakening momentum raise downside risks

Dogecoin extends its losses, trading around $0.090 down more than 5% so far this week. Bearish pressure is strengthening, with short positions reaching a one-month high and traders in overheated conditions. Meanwhile, weakening momentum indicators are also hinting at further losses in DOGE. Derivatives data shows cautious signals among traders.

Indian Rupee hits fresh four-month low, RBI hikes Repo Rate to 5.5%

The Indian Rupee weakens significantly against the US Dollar after a muted response, following the Reserve Bank of India’s monetary policy meeting on Wednesday. The USD/INR pair jumps to near 96.72, the highest level seen in four months. In the policy meeting, the RBI decide to hike its Repo Rate by 25 basis points to 5.5%, the first hike since February 2023.

Eurozone inflation just hit 3.8%, its highest in three years. This chart shows why the ECB can’t simply hike its way out

The ECB would normally have a relatively straightforward answer to inflation running almost twice its target: raise interest rates. But these are not normal circumstances. This time, the bond market is already doing part of the tightening for it, leaving the ECB facing an increasingly difficult dilemma.