Swiss Franc Strengthens as Markets Await SNB Rate Call, Fed Hike Odds Rise
The Swiss Franc has strengthened against major currencies ahead of the Swiss National Bank's interest rate announcement due later today. According to DBS Group Research, the SNB is expected to keep its policy rate at 0%, but will likely raise its near-term inflation forecast due to elevated energy prices and persistent uncertainty in the Middle East.
The US Dollar has retreated despite increased expectations of a Federal Reserve rate hike in October. The latest Flash US S&P Global PMI data showed the manufacturing sector expanding more than anticipated, with market expectations for a 25-basis-point Fed rate increase climbing to nearly 69.7%.
USD/CHF is trading around 0.8240, holding above both its short-term and medium-term exponential moving averages. The pair retains a short-term bullish tone, but the elevated Relative Strength Index suggests that gains could moderate if momentum moves closer to overbought territory.