USD/CHF Awaits Fed Verdict
The USD/CHF pair moved flat around 0.8050–0.8060 in the late Asian session on Wednesday. The market is in wait-and-see mode ahead of the Fed's monetary policy announcement at 19:00 GMT. The US Dollar Index (DXY) also tended to be flat around 99.20 as market participants remained uncertain about the future direction of interest rates, although most believe the Fed will cut rates again at this meeting.
According to CME FedWatch, the probability of the Fed cutting interest rates by 25 bps to a range of 3.50%–3.75% at its December meeting is around 87.6%. This would be the third consecutive rate cut. However, the market is skeptical that the Fed will sound too dovish, as US inflation remains clearly above its 2% target. This means that even if interest rates are cut, the tone of communication could remain cautious and hold back expectations of an aggressive cut in 2026.
Regarding the Swiss Franc, the next focus turns to the Swiss National Bank (SNB) policy meeting on Thursday. The SNB is expected to maintain interest rates at 0%, even though the November CPI barely moved on a year-over-year basis. SNB Chairman Martin Schlegel emphasized that the threshold for returning to negative interest rates is very high due to the undesirable side effects for savers and pension funds. The combination of a Fed that might cut but isn't overly dovish, and a relatively quiet SNB, is what has caused USD/CHF to temporarily consolidate without a clear direction. (asd)
Source: Newsmaker.id
