- USD/CHF price action is subdued, as the US and Switzerland will feature monetary policy decisions by their central banks.
- US inflation is expected to remain at around current levels ahead of the Fed’s decision.
- The SNB is projected to keep rates unchanged as inflation remains below the central bank’s target.
The USD/CHF commences the week virtually unchanged, losing 0.08%, amid a busy week for the United States (US). The release of US inflation data and the Federal Reserve monetary policy decision would be the two main drivers of price action in the financial markets. Nevertheless, as usually happens in a Fed week, price action is constrained, with the major exchanging hands at 0.8785 after hitting a high of 0.8816.
USD/CHF at the mercy of US inflation and Fed/SNB decisions
On Tuesday, the US Bureau of Labor Statistics (BLS) will update inflation data, which is expected to remain at around current levels, ahead of the Fed’s decision. Headline inflation in November is expected to dip on an annual basis from 3.2% to 3.1%, while core inflation would likely remain unchanged at 4%.
The data is not expected to move the needle amongst Federal Reserve officials, which have become more neutral-biased as inflation continues to slow down. Nevertheless, the Producer Price Index (PPI) would be released on Wednesday early morning, ahead of the Fed’s decision.
If the Fed struck a hawkish hold, that could trigger another repricing for interest rate cuts for the next year. After last week’s Nonfarm Payrolls report, market participants priced out one rate cut for the upcoming year.
On the Switzerland front, the Swiss National Bank (SNB) is expected to keep rates unchanged at 1.75% on Thursday. Traders should remember that the SNB only meets four times a year, and as inflation slowed, the message would likely lean toward the neutral side.
USD/CHF Price Analysis: Technical outlook
The major remains downward biased unless USD/CHF bulls lift the spot price and reclaim the latest cycle low at around 0.8887, the October 24 daily low. Once that level is taken out, along with the 100-day moving average (DMA) at around 0.8901, expect a test of the 0.8934/47 area the confluence of the 50 and 200-DMAs, respectively, before climbing to 0.9000. On the other hand, further downside is seen below the December 4 swing low of 0.8666.
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 trades sideways below 1.0450 amid quiet markets
EUR/USD defends gains below 1.0450 in European trading on Monday. Thin trading heading into the Xmas holiday and a modest US Dollar rebound leaves the pair in a familair range. Meanwhile, ECB President Lagarde's comments fail to impress the Euro.
GBP/USD stays defensive below 1.2600 after UK Q3 GDP revision
GBP/USD trades on the defensive below 1.2600 in the European session on Monday. The pair holds lower ground following the downward revision to the third-quarter UK GDP data, which weighs negatively on the Pound Sterling amid a broad US Dollar uptick.
Gold price holds comfortably above $2,600 mark; lacks bullish conviction
Gold price oscillates in a range at the start of a new week amid mixed fundamental cues. Geopolitical risks continue to underpin the XAU/USD amid subdued US Dollar price action. The Fed’s hawkish stance backs elevated US bond yields and caps the pair’s gains.
The US Dollar ends the year on a strong note
The US Dollar ends the year on a strong note, hitting two-year highs at 108.45. The Fed expects a 50-point rate cut for the full year 2025 versus 4 cuts one quarter earlier, citing higher inflation forecasts and a stubbornly strong labour market.
Bank of England stays on hold, but a dovish front is building
Bank of England rates were maintained at 4.75% today, in line with expectations. However, the 6-3 vote split sent a moderately dovish signal to markets, prompting some dovish repricing and a weaker pound. We remain more dovish than market pricing for 2025.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.