- USD/CHF halts a two-day losing streak ahead of Fed policy decision.
- SNB is widely anticipated to hold its interest rate at 1.75% following the recent downbeat inflation.
- Investors await Fed Chair Jerome Powell's comments to gain insights into the interest rates trajectory.
USD/CHF hovers around 0.8760 during the Asian trading hours on Wednesday, snapping two days of losses as the US Dollar improves on upbeat US bond yields. The Swiss National Bank (SNB) is anticipated to keep its policy rate steady at 1.75% in Thursday’s meeting, particularly in light of the recent easing of Swiss inflation in November.
The upcoming Monetary Policy Assessment in the Quarterly Bulletin will offer valuable insights into the SNB's outlook, providing a medium-term conditional inflation forecast.
The US Dollar Index (DXY) moves on an upward trajectory, approaching the 104.00 level, supported by higher yields on both the 2-year and 10-year US bond coupons, standing at 4.73% and 4.20%, respectively, by the press time.
The cautious approach of market participants ahead of the Federal Reserve's policy decision indeed introduces an element of uncertainty that could potentially exert downward pressure on the Greenback, consequently impacting the USD/CHF pair. While the expectation is for the Federal Open Market Committee (FOMC) to maintain its current policy stance, the focus on cues regarding potential rate cuts in 2024 adds a layer of intrigue for investors.
The significance of Federal Reserve Chair Jerome Powell's comments becomes even more pronounced, as they hold the potential to shape market expectations and influence movements of the USD/CHF pair.
The US Dollar's recent bout of high volatility, fueled by the release of the Consumer Price Index (CPI) figures, reflects the market's reaction to the 3.1% year-on-year increase, as expected in November against the 3.2% readings previously. The parallel uptick in the US Core CPI at 4.0% aligns with market expectations, indicating a degree of predictability in inflation trends.
As market participants await the release of the US Producer Price Index (PPI) for November, the focus shifts to expectations of a growth reduction to 1.0% yearly. Projections for an easing Core PPI at 2.2%, compared to the 2.4% prior, add another layer to the market's anticipation.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD stays below 1.1000 after EU data
EUR/USD fluctuates in a tight range below 1.1000 in the European session on Monday. The data from the Eurozone showed that Retail Sales rose by 0.2% on a monthly basis in August as forecast, failing to boost the Euro. Investors await comments from Fed officials.
GBP/USD struggles near 1.3100, Fedspeak awaited
GBP/USD is struggling near 1.3100 in European trading on Monday, erasing early gains. The pair is undermined by a negative shift in risk sentiment but the downside appears capped amid the US Dollar retreat ahead of speeches from several Fed policymakers.
Gold price keeps the red below $2,650, remains confined in a familiar trading range
Gold price remains on the defensive amid reduced bets for a 50 bps Fed rate cut in November. The USD consolidates last week’s strong gains and exerts some pressure on the XAU/USD. Geopolitical risks might continue to act as a tailwind and limit losses for the precious metal.
Is Dogecoin ready for a rally?
Dogecoin price extends gains on Monday after retesting its support level last week. This rise is supported by DOGE’s daily active addresses, an on-chain metric that has spiked to the highest level since early April.
RBA widely expected to keep key interest rate unchanged amid persisting price pressures
The Reserve Bank of Australia is likely to continue bucking the trend adopted by major central banks of the dovish policy pivot, opting to maintain the policy for the seventh consecutive meeting on Tuesday.
Five best Forex brokers in 2024
VERIFIED Choosing the best Forex broker in 2024 requires careful consideration of certain essential factors. With the wide array of options available, it is crucial to find a broker that aligns with your trading style, experience level, and financial goals.