USD/CHF edges higher as traders brace for SNB interest rate decision

USD/CHF adds nominal gains as the Swiss Franc is weighed down by uncertainty ahead of the SNB’s policy decision.
The SNB is expected to cut interest rates for the third straight time.
Growing expectations for Fed large rate cuts in November keep the US Dollar under pressure.

Sagar Dua FXStreet

The USD/CHF pair is marginally higher to near 0.8480 in Tuesday’s European session. The Swiss Franc asset edges higher as the Swiss Franc (CHF) weakens amid uncertainty ahead of the Swiss National Bank’s (SNB) interest rate decision, which will be announced on Thursday.

The SNB is widely anticipated to cut interest rates by 25 basis points (bps) to 1%. This would be the third straight quarter-to-a-percentage rate cut as inflation in the Swiss economy has been sustained below the bank’s target of 2% since June 2023. In August, the annual Consumer Price Index (CPI) decelerated further to 1.1%, the lowest from April of this year.

Meanwhile, the Swiss Franc asset gains despite the US Dollar (USD) retreats as growing concerns over the United States (US) job growth have stoked market expectations for second straight Federal Reserve (Fed) 50 bps interest rate cut in the November meeting. The US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, declines to 100.80.

“The Federal Reserve to cut rates by another 50 basis points in November, a decision that will largely depend on incoming data, especially the next monthly jobs report,” according to strategists from Citi.

Later this week, investors will pay close attention to the US Personal Consumption Expenditure Price Index (PCE) for August, which will be published on Friday. The US core PCE inflation, a Fed’s preferred inflation gauge, is estimated to have accelerated to 2.7% from 2.6% in July.

Economic Indicator

SNB Interest Rate Decision

The Swiss National Bank (SNB) announces its interest rate decision after each of the Bank’s four scheduled annual meetings, one per quarter. Generally, if the SNB is hawkish about the inflation outlook of the economy and raises interest rates, it is bullish for the Swiss Franc (CHF). Likewise, if the SNB has a dovish view on the economy and keeps interest rates unchanged, or cuts them, it is usually bearish for CHF.

EUR/USD flirts with daily highs, retargets 1.1900

EUR/USD regains upside traction, returning to the 1.1880 zone and refocusing its attention to the key 1.1900 barrier. The pair’s slight gains comes against the backdrop of a humble decline in the US Dollar as investors continue to assess the latest US CPI readings and the potential Fed’s rate path.

GBP/USD remains well bid around 1.3650

GBP/USD maintains its upside momentum in place, hovering around daily highs near 1.3650 and setting aside part of the recent three-day drop. Cable’s improved sentiment comes on the back of the Greenback’s irresolute price action, while recent hawkish comments from the BoE’s Pill also collaborate with the uptick.

Gold clings to gains just above $5,000/oz

Gold is reclaiming part of the ground lost on Wednesday’s marked decline, as bargain-hunters keep piling up and lifting prices past the key $5,000 per troy ounce. The precious metal’s move higher is also underpinned by the slight pullback in the US Dollar and declining US Treasury yields across the curve.

Crypto Today: Bitcoin, Ethereum, XRP in choppy price action, weighed down by falling institutional interest

Bitcoin's upside remains largely constrained amid weak technicals and declining institutional interest. Ethereum trades sideways above $1,900 support with the upside capped below $2,000 amid ETF outflows.

Week ahead – Data blitz, Fed Minutes and RBNZ decision in the spotlight

US GDP and PCE inflation are main highlights, plus the Fed minutes. UK and Japan have busy calendars too with focus on CPI. Flash PMIs for February will also be doing the rounds. RBNZ meets, is unlikely to follow RBA’s hawkish path.

Ripple Price Forecast: XRP potential bottom could be in sight

Ripple edges up above the intraday low of $1.35 at the time of writing on Friday amid mixed price actions across the crypto market. The remittance token failed to hold support at $1.40 the previous day, reflecting risk-off sentiment amid a decline in retail and institutional sentiment.