The USDCHF exchange rate is influenced by interest rate and policy updates from the Swiss and U.S. central banks.
USDCHF – Daily Chart
The price of USDCHF has found resistance over the last months at the 0.8101 level. A move back to the 0.8000 level in the data could lead to a move back to the lows.
The U.S. Federal Reserve will release its latest policy decision and press conference update overnight, but traders expect to see another rate cut from the bank.
Despite some sticky inflation data, a weakening jobs market, and pressure from President Trump, another cut is likely. The real event will be the press conference, which could move USD/CHF.
If Federal Reserve Chair Jerome Powell signals further rate cuts, then the Franc could advance. The market focus is now on the Fed’s rate decision and with little new data released since the last meeting, the Fed is unlikely to signal a January move. Traders will have to dissect the press conference for hints on the path of interest rates in the year ahead.
The press conference will present the Swiss bank’s version on Thursday, with the decision released at 3:30pm HKT and the press conference at 4:00pm HKT.
Swiss consumer price inflation slowed down unexpectedly in November, as the country’s central bank meets to discuss a move to negative interest rates. CPI was unchanged from a year ago, following a 0.1% rise in October. A consensus of economists from a Wall Street Journal survey expected consumer prices to rise by 0.1%.
“This makes it more likely that the SNB will cut into negative rates, though we expect the bank to leave rates on hold…and wait until either March or, most likely, June to cut,” an analyst at Capital Economics said.
Growth has also been under pressure after U.S. tariffs led to a contraction in the third quarter. However, a later agreement to lower tariffs has reduced the risk that the economy will enter a longer recession. That would have led to a steeper decline in CPI, and the SNB must now decide on short-term rate policy.
A stronger Swiss franc could signal that rates could be cut, with the currency up around 13% year to date. However, the central bank has been less focused on the franc’s value recently, analysts at Rabobank noted.
