- 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
AUD/USD: Next on the downside comes 0.6500
Further gains in the US Dollar kept the price action in commodities and the risk complex depressed on Tuesday, motivating AUD/USD to come close to the rea of the November low near 0.6500.
EUR/USD: No respite to the sell-off ahead of US CPI
The rally in the Greenback remained well and sound for yet another session, weighing on the risk-linked assets and sending EUR/USD to new 2024 lows in the vicinity of 1.0590 prior to key US data releases.
Gold struggles to retain the $2,600 mark
Following the early breakdown of the key $2,600 mark, prices of Gold now manages to regain some composure and reclaim the $2,600 level and beyond amidst the persistent move higher in the US Dollar and the rebound in US yields.
SOL Price Forecast: Solana bulls maintain $250 target as Binance lists ACT and PNUT
Solana price retraced 7% from $225 to $205 on Tuesday, halting a seven-day winning streak that saw SOL become the third-largest cryptocurrency by market capitalization.
Five fundamentals: Fallout from the US election, inflation, and a timely speech from Powell stand out Premium
What a week – the US election lived up to their hype, at least when it comes to market volatility. There is no time to rest, with politics, geopolitics, and economic data promising more volatility ahead.
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.