The SNB is anticipated to maintain its policy rate at 0% on September 24, although projections may still be subject to change. The US Dollar halted its three-day rally and relinquished daily gains, even as hawkish expectations from the Federal Reserve persist. Robust US manufacturing data elevates the likelihood of an October Fed rate hike to 69.7%. USD/CHF loses ground after registering modest gains the previous day, trading around 0.8240 on Thursday. Market participants are closely monitoring the impending interest rate decision from the Swiss National Bank, scheduled for later today. Economists anticipate that the SNB will maintain its policy rate at 0% during the meeting on September 24. However, they perceive potential for adjustments in the bank’s projections.
DBS observes that the SNB is “nevertheless likely to raise its near-term inflation forecast as elevated energy prices feed through into the economy amid persistent uncertainty in the Middle East,” despite improvements in Swiss growth and recent easing in CHF valuation pressures against the Euro and Pound, which diminishes the urgency for a policy adjustment. The USD/CHF pair depreciates as the US Dollar loses its daily gains and halts its three-day winning streak despite an ongoing hawkish sentiment surrounding the Federal Reserve policy outlook. The recent Flash US S&P Global PMI data for September underscored a hawkish momentum, revealing that manufacturing expanded at a faster-than-anticipated rate of 52.0. This development contributed to mitigating minor declines observed in services and composite activity.
In light of recent US economic indicators, market anticipations for a 25-basis-point increase in the Federal Reserve’s interest rate for October have risen significantly to approximately 69.7%, a notable increase from 48.7% observed the previous week. Traders are now focusing on the forthcoming US weekly Initial Jobless Claims report, as several Fed officials have reaffirmed their backing for the recent rate hike and have issued new cautions about ongoing inflation risks. In the daily chart, USD/CHF is positioned at 0.8240, maintaining a bullish near-term outlook as the price remains above the short-term and medium-term exponential moving averages. The nine- and 50-period Exponential Moving Averages are positioned beneath the market, indicating a foundational uptrend structure.
Meanwhile, the 14-day Relative Strength Index at approximately 63 reflects solid, albeit not excessive, positive momentum. The FXS Fed Sentiment Index around 148 reinforces a supportive macro backdrop for the dollar, aligning with the constructive technical tone. On the downside, initial support is observed at the 9-period EMA at 0.8213, with a more substantial cushion provided by the 50-period EMA near 0.8121 should corrective pressures persist. In the absence of proximate technical resistance levels from the current dataset, the pair seems inclined to persist in its ascent, provided it remains above 0.8213. However, the heightened RSI suggests that upward movement may decelerate should momentum near overbought conditions.
