Economy Forex

USD/CHF holds steady near 0.9250 and moves after the SNB

  • USD/CHF is witnessing moderate and range bound price action during the European session.
  • The market reacts shortly after the SNB announced its monetary policy decision on Thursday.
  • Risk appetite and the Fed’s optimistic tilt supports the prospects of some near-term hike.

As of early European session, USD/CHF is trading at 0.9252 and little has changed since the Swiss National Bank (SNB) announced its monetary policy decision.

It has struggled to capitalize on the previous day’s post-FOMC bounce from 0.9215 and has traded between tepid gains and minor losses during the first half of trading action on Thursday. Following the Fed’s upbeat tone the previous day, the US dollar has retreated from one-month highs, acting as a headwind for USD/CHF.

USD/CHF

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Despite this, the prevailing risk appetite in the markets has continued to weigh on safe-haven demand for the Swiss franc and has helped limit the downside for USD/CHF. Investors were unimpressed by the SNB board’s decision to leave the monetary policy setting unchanged in the September quarter monetary policy assessment on Thursday.

In the meantime, the Fed indicated that a slowing of asset purchases may soon be warranted if the economic recovery continues broadly. In adition, Fed Chairman Jerome Powell said that asset purchases from the pandemic era may cease by mid-2022. Moreover, the dot plot showed a growing tendency to raise interest rates in 2022.

The situation should help revive USD demand and provide the basis for some near-term upside movement in USD/CHF. Therefore, any significant drop could still be viewed as a buying opportunity and remain limited. Further momentum will come from the US economic calendar, with the release of preliminary PMI and weekly jobless claims.

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Michelle D. Madsen

Michelle D. Madsen graduated from the University of Westminster and has been deeply involved in the world of finance ever since. She has worked as a Broadcast Journalist hosting various news shows and informative webcasts about the financial markets. Since 2004 she has also been writing for Metanews daily, her attention to detail, and her in-depth knowledge of the financial markets have led her to cover Foreign Exchange and commodities. The world of finance has changed in the last few years with the introduction and rising popularity of cryptocurrencies. She has in no means been left behind, adding this to her bank of intellect and is now also an expert in cryptocurrencies. For the last ten years, Ms. Madsen has been engaged in the financial market. She has notedly written a great number of incredibly informative reviews for the crypto exchange and forex brokers. Her wealth of knowledge has enabled her to become a leading expert in the field. She continues to inform the public writing up-to-date, thorough reviews for the readers of Metanews as she has for the last decade.
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