- USD/CHF posts modest gains near 0.8840 in Wednesday’s early European session.
- The Swiss National Bank (SNB) is expected to keep its interest rate steady at 1.5% in the June meeting on Thursday.
- The US Retail Sales were weaker than expected, rising 0.1% MoM in May.
The USD/CHF pair trades with mild gains near three-month lows around 0.8840 during the early European session on Wednesday. The modest rebound of the pair might be limited as traders raised their bets on the US Federal Reserve (Fed) rate cut this year. US markets will be closed on Wednesday due to Juneteenth National Independence Day. Investors await the Swiss National Bank (SNB) Interest Rate Decision on Thursday, with no change in rate expected.
The Swiss central bank is anticipated to keep its interest rate on hold at 1.5% as the nation's inflation remains elevated for the second consecutive month in May. Ahead of the policy meeting, investors have priced in nearly 60% odds of an SNB rate cut, down from 97% in April, according to Bloomberg. However, economists are roughly split on the decision. ”We expect the policy rate to be cut by 25bp to 1.25% at this upcoming meeting ... it is our base case because inflation is within the target range, it is expected to remain there, and the SNB thinks the policy is currently restrictive," said Nomura European economist George Moran.
On the other hand, the weaker-than-expected US Retail Sales report on Tuesday has triggered speculation that the Fed will start to cut interest rates in a few months, which drag the Greenback lower against its rivals. The US Retail Sales rose 0.1% on a monthly in May following a decline of 0.2% in April, below the consensus of a 0.2% increase, the Commerce Department reported Tuesday.
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