The USD/CHF pair is struggling to extend its modest uptick from the Asian session and remains near the lower end of its daily trading range, with subdued US Dollar (USD) price action. Despite this, the pair is holding steady above the 0.8200 mark, as traders await the outcome of the two-day Federal Open Market Committee (FOMC) meeting starting later today.
The Federal Reserve is widely expected to maintain its current interest rate level when it announces its decision on Wednesday. Following a stronger-than-anticipated US jobs report last Friday and better-than-expected ISM Services PMI data on Monday, market participants have reduced expectations for a rate cut in June. As a result, the focus has shifted to the Fed’s policy statement and comments from Fed Chair Jerome Powell during the post-meeting press conference. Investors are keen to gain insights into the Fed’s future rate-cut plans, which will likely influence the USD and provide further direction for the USD/CHF pair.
Despite these expectations, the USD has faced challenges in attracting significant buying interest, partly due to the economic uncertainty surrounding President Donald Trump’s unpredictable trade policies. In addition, ongoing geopolitical tensions, particularly the prolonged Russia-Ukraine conflict and rising tensions in the Middle East, are overshadowing recent signs of easing US-China trade relations. These factors are supporting the safe-haven Swiss Franc (CHF), further limiting any upside potential for the USD/CHF pair. At the same time, market participants are reluctant to make bearish bets ahead of the key central bank event.
As such, the market will likely wait for a clear break below the 0.8200 level to signal that the recent recovery from the 0.8040 region—its lowest point since September 2011—has lost momentum. On the other hand, bullish traders may look for a move above the 0.8300-0.8330 congestion zone before seeking further upside potential in the near term.
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