- USD/CHF appreciates as the US Dollar gains ground after the release of the FOMC Meeting Minutes.
- The FOMC Meeting Minutes showed that most members adopted a cautious stance on policy decisions.
- The newly imposed 39% US tariff on Swiss imports is expected to hit Switzerland’s export-driven economy.
USD/CHF appreciates after registering nearly 0.5% losses in the previous session, trading around 0.8050 during the Asian hours on Thursday. The pair appreciates as the US Dollar (USD) receives support after the release of the Federal Open Market Committee’s (FOMC) Minutes for the July 29-30 meeting on Wednesday. Swiss Trade Balance data will be eyed later in the day. Focus will be shifted to the preliminary S&P Global US Purchasing Managers Index (PMI) data due later in the North American session.
The Fed minutes indicated that most Federal Reserve (Fed) officials emphasized that inflation risks outweighed labor market concerns during last month’s meeting, as tariffs deepened divisions among policymakers. Most policymakers considered it appropriate to maintain the benchmark interest rate in the 4.25%–4.50% range.
The CME FedWatch tool indicated that Fed funds futures traders are currently pricing in an 82% chance of a rate cut in September. Fed Chair Jerome Powell’s speech will be eyed at the Jackson Hole Symposium in Wyoming on Friday, which may provide further impetus for the September policy decision.
Swiss inflation remained below the Swiss National Bank’s (SNB) 2% target, bolstering expectations for further rate cuts, potentially back into negative territory. Additionally, the newly imposed 39% US duty on Swiss imports is set to weigh heavily on Switzerland’s export-driven economy and could increase pressure on the Swiss National Bank (SNB) to further ease policy.
