- USD/CHF rises toward 0.9050 as the US Dollar strengthens ahead of the FOMC minutes.
- The Fed signaled in January that rates will stay unchanged amid a strong labor market and persistent inflation.
- The SNB is likely to maintain its ultra-dovish monetary policy stance.
The USD/CHF pair extends its rally for the third consecutive day, rising toward 0.9050 on Wednesday. Despite some fluctuations, the US Dollar (USD) remains firm ahead of the Federal Open Market Committee (FOMC) minutes release at 19:00 GMT. The US Dollar Index (DXY) hovers near 107.00 as investors await further policy cues.
Markets are closely watching the FOMC minutes for insights on the Federal Reserve’s (Fed) stance on interest rates. In January, the Fed kept rates unchanged at 4.25%-4.50%, emphasizing that further adjustments would depend on inflation progress and labor market conditions.
Meanwhile, risk sentiment remains steady despite US President Donald Trump’s threat to impose 25% tariffs on foreign cars, pharmaceuticals, and semiconductors. The lack of a clear timeline for implementation has eased immediate concerns.
The Swiss Franc (CHF) weakens as the Swiss National Bank (SNB) is expected to maintain an ultra-dovish stance amid subdued inflation, which has fallen to 0.4%, its lowest since May 2021.
Technically, USD/CHF aims to revisit its 15-month high near 0.9200. The pair remains in an uptrend, with the 20-week Exponential Moving Average (EMA) around 0.8950 trending higher. However, the 14-week Relative Strength Index (RSI) has retreated from bullish levels, indicating fading momentum.
A decisive break above the October 2023 high of 0.9244 could open the door to further gains toward 0.9300 and the March 2023 high of 0.9342. On the downside, a drop below the psychological support of 0.9000 could push the pair toward the November 22 high of 0.8958 and the December 16 low of 0.8900.
USD/CHF weekly chart
