The USD/CHF pair has witnessed a second consecutive upward movement, reaching near 0.8630 during the Asian session on Wednesday. The positive momentum is attributed to market anticipation and support leading up to the Federal Reserve’s (Fed) interest rate decision later in the day. Investors seem to have factored in expectations that the Fed is likely to maintain the status quo in the January meeting.
Despite this consensus, the CME’s FedWatch Tool indicates a 43% probability of the Federal Reserve implementing the first rate cut in March, with a 53% chance of a 25 basis points rate cut in May. These probabilities suggest that investors are positioning themselves for potential shifts in the Fed’s monetary policy in the coming months, with potential implications for the USD/CHF pair.
Tuesday saw positive economic indicators in the form of the US JOLTS Job Openings for December, showing improvement at 9.026 million compared to the previous 8.925 million and surpassing the expected 8.750 million. Meanwhile, the US Housing Price Index (MoM) remained steady at 0.3% in November.
Market attention now turns to the eagerly awaited US ADP Employment Change data scheduled for release on Wednesday. This data is often viewed as a precursor to the more comprehensive US Nonfarm Payrolls report set to be unveiled later in the week.
In contrast, the Federal Customs Administration of Switzerland reported a decrease in December’s Imports to 17,551 million from the previous 20,454 million. Exports (MoM) also declined to 18,798 million from the prior figure of 24,287 million, resulting in a reduced Trade Balance of 1,248 million from 3,833 million.
Last week, SNB President Thomas Jordan expressed uncertainty regarding the Swiss National Bank’s (SNB) stance on the persistent strength of the currency. Traders will closely observe Wednesday’s Real Retail Sales and the ZEW Survey to gauge the overall health of the Swiss economy.