The Swiss Franc (CHF) strengthened against the US Dollar (USD), with the USD/CHF pair trading around 0.8090 during Asian hours on Thursday, following a previous day of gains for the USD. This move comes as the US Dollar weakened after a Reuters poll indicated that most economists expect the Federal Reserve (Fed) to keep interest rates steady at its September 15-16 meeting and for the remainder of the year, despite recent strong US economic data and increased market bets on a rate hike, with the CME FedWatch Tool showing over 60% odds for such a move at the upcoming policy meeting [1]. The CHF also found support from expectations of tighter monetary policy and higher inflation among major central banks, as well as continued safe-haven demand. Swiss inflation doubled in August to 0.8%, though this is expected to be temporary, and quarterly economic growth reached a five-year high of 1.5%. A Swiss Bankers Association survey indicated that all bankers expect the Swiss National Bank to keep its policy rate at 0% by year-end [1].
Meanwhile, the EUR/USD pair attracted dip-buyers during the Asian session, trading just below the mid-1.1600s and near a one-and-a-half-week high reached on Wednesday. The market is focused on the upcoming European Central Bank (ECB) meeting, where a 25 basis point rate hike—the second this year—is widely anticipated. Attention is turning to ECB President Christine Lagarde's post-meeting press conference for guidance on future policy, which could drive the Euro's direction [2]. Technical indicators for EUR/USD remain constructive, with spot prices above the 200-period EMA at 1.1582 and the 23.6% Fibonacci retracement at 1.1625, while the Relative Strength Index is just below overbought at 58. The next resistance is at 1.1709, with support at 1.1625 and 1.1580–1.1570 [2].
Both articles highlight the importance of upcoming US inflation data, specifically the Producer Price Index (PPI) and Consumer Price Index (CPI), which are expected to provide crucial signals for the Fed's monetary policy decision next week [1][2]. While the USD/CHF pair is expected to remain range-bound between 0.8055 and 0.8155 in the near term, according to UOB Group strategists [1], the EUR/USD pair's direction will likely hinge on the ECB's tone and US inflation outcomes [2].
Market participants are thus positioned cautiously, awaiting central bank decisions and key economic data releases that could set the tone for currency movements in the coming weeks [1][2].
CONCLUSION
Both the Swiss Franc and Euro have gained ground against the US Dollar as traders await pivotal central bank meetings and US inflation data. The market remains cautious, with technical and fundamental factors suggesting limited directional moves until further clarity emerges from the Fed and ECB policy decisions.