USD/CHF On Edge Ahead of Fed and SNB Rate Decisions
The USD/CHF price held steady on Wednesday as the market waited for the upcoming rate decisions by the Federal Reserve and the Swiss National Bank (SNB). It rose to a high of 0.9657, which was significantly higher than this week’s low of 0.9482.
Fed and SNB decisions ahead
The USD to Swiss franc will be in the spotlight as the Fed concludes its two-day monetary policy meeting on Wednesday. Economists expect that the Fed will decide to hike interest rates by another 0.75% as its battle against inflation rises.
Indeed, the bond market expects that the Fed will continue hiking interest rates in the coming months. For one, the two-year bond yield rose to 4%, which was the highest level in over 15 years. The benchmark 10-year yield also continued rising.
Meanwhile, the Swiss National Bank (SNB) will also conclude its two-day meeting on Thursday. Like other global central banks, analysts expect that the bank will also continue hiking interest rates in this meeting. Precisely, they expect that it will hike by 0.50% and officially move away from negative interest rates.
Still, the SNB is known for its surprises, meaning that there is a likelihood that it will leave rates unchanged or deliver a bigger hike than expected.
The daily chart shows that the USD/CHF pair has been in a downward trend in the past few days. It has formed a descending channel that is shown in black. At the same time, it has moved to the 25-day and 50-day moving averages while the MACD has moved slightly below the neutral level.
Therefore, there is a likelihood that the USD to CHF exchange rate will resume the bearish trend as sellers target the key support at 0.9400. Find out how to send money to Switzerland here.