- USD/CHF flattens around 0.7960 as investors shift focus to the Fed’s monetary policy meeting.
- The Fed is expected to cut interest rates by 75 bps in the remainder of the year.
- Swiss producer inflation is expected to have grown by 0.1% in August.
The USD/CHF pair trades in a tight range around 0.7960 during the late Asian trading session on Monday. The Swiss Franc pair flattens as the US Dollar (US) is expected to remain on the sidelines ahead of the monetary policy announcement by the Federal Reserve (Fed) on Wednesday.
At the time of writing, the US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, trades calmly inside Friday’s range around 97.60.
The outlook of the US Dollar remains on the back foot as market experts believe that the Fed will start the monetary-easing campaign on Wednesday and will open the door for more interest rate cuts amid escalating labor market risks.
Analysts at Deutsche Bank have forecasted that the Fed will cut interest rates by 25 bps in all of its three remaining monetary policy meetings remaining this year. The reasoning behind their Fed dovish expectations is slowing job growth in the wake of tariffs imposed by United States (US) President Donald Trump.
Before the Fed’s monetary policy announcement, investors will focus on the US Retail Sales data for August, which will be released on Tuesday. US Retail Sales, a key measure of consumer spending, is expected to have grown at a moderate pace of 0.3% against 0.5% in July.
In Switzerland, investors await Producer and Import Prices data for August, which will be published at 06:30 GMT. As measured by Producer and Import Prices, the producer inflation is expected to have grown by 0.1% after deflating for three months in a row. An increase in producer inflation will offer some relief to Swiss National Bank (SNB) officials, which have been worried about downside inflation risks.
