USD/CHF trades on a stronger note below the mid-0.8800s, Fed Chair Powell’s testimony eyed

The USD/CHF pair trades on a stronger note around the mid-0.8800s during the early European trading hours on Wednesday. The testimony of the Federal Reserve Chairman Jerome Powell at Capitol Hill later in the day will be a closely watched event. The hawkish comments from the Fed could lift the US Dollar (USD) against its rivals. At press time, USD/CHF is trading at 0.8845, gaining 0.15% on the day. 

Financial markets expect the Fed to start cutting rates in the June meeting and forecast four quarter-percentage-point cuts in total this year, according to the CME FedWatch Tools. However, the timetable is uncertain, and Fed officials want to see more data before starting to lower the interest rate. 

On Tuesday, the US ISM Services PMI came in weaker than expected, falling to 52.6 in February from 53.4 in the previous month. Meanwhile, the New Orders Index rose to 56.1 from 55.0 in the previous reading. The Employment Index declined to 48.0 versus 50.5 prior, and the Prices Paid Index dropped to 58.6 from 64.0 in the previous reading. 

Earlier this week, Switzerland’s Consumer Price Index (CPI) dipped to 1.2% YoY in February from 1.3% in January, above the market estimate of 1.1%. This figure registered the lowest inflation rate since October 2021. The Swiss National Bank (SNB) will hold its next meeting on March 21 and February and will influence SNB about interest rates.