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Swiss franc firms ahead of SNB decision as USD/CHF slips
DBS expects the SNB to keep its policy rate at 0% at its Sept. 24 meeting, while traders look for potential changes to the bank’s projections.
FXStreet reports that the USD/CHF exchange rate fell from modest gains the prior session, trading around 0.8240 during Asian hours on Thursday as traders waited for the Swiss National Bank, or SNB, interest rate decision later in the day.
Economists at DBS Group Research expect the SNB to leave its policy rate unchanged at 0% at the Sept. 24 meeting, but they still see room for the bank to adjust its projections. DBS also noted the SNB is nevertheless likely to lift its near term inflation forecast, citing elevated energy prices feeding through to the economy amid persistent uncertainty in the Middle East, even as Swiss growth has improved.
The article says the USD weakened after pausing a three day winning streak despite hawkish expectations around Federal Reserve policy. It points to recent Flash US S&P Global PMI data for September, with manufacturing expanding faster than expected, and notes markets have priced a roughly 69.7% chance of a 25 basis point Fed hike in October, up from 48.7% last week.
Technically, USD/CHF held a bullish near term bias while trading above short term and medium term exponential moving averages, with the nine and 50 period EMAs below the market. FXStreet identifies nearby support around the 9 period EMA near 0.8213, and a deeper level near the 50 period EMA around 0.8121, adding that an RSI near 63 suggests firm but not extreme positive momentum.