Briefly-
- Tuesday sessions saw USD/CHF rising towards parity levels.
- Focus remains on the upcoming rate decisions by SNB and Fed.
- The upside will continue in the short term.
USD/CHF had its price rising towards the parity levels for the first time since May. That came as the markets await upcoming interest rate moves by the Swiss National Bank and the Fed Reserve.
While publishing this content, the pair trades at 1.0004, slightly beneath the 1.0065 YTD high. Moreover, USD/CHF has climbed by over 4.8% from this month’s lowest mark.
Fed and SNB Decision
EUR/CHF and USD/CHF have maintained upside movements ahead of anticipated decisions by SNB and the Fed. Analysts trust the Swiss National Bank will finalize its 2-day meeting this week on Thursday.
Moreover, they believe the central bank won’t change interest rates. Nevertheless, analysts see the bank confirming 0.25% rate hikes during the September meeting. SNB hasn’t signaled rate hikes in its previous meetings.
That would mean a massive tone change for a bank that maintained a somewhat dovish stance for over a decade. It has decreased interest rates to -0.75% and spent many dollars to devalue the Swiss franc.
Meanwhile, the Swiss National Banks battles heightened inflation like other central banks. Recent data indicate that headline inflation surged over 2%, whereas producer inflation also increased. Meanwhile, the unemployment rate stayed at the 2.1% record low.
USD/CHF price approached parity level as markets await Fed’s monetary decision. Analysts expect the bank to raise the rates by 0.75%, translating to the highest hike in decades.
The rate decision comes when the United States experiences massive inflation pressure. The US headline CPI surged to 8.6% 41-year peaks. Also, core inflation noted an uptick.
USD/CHF Price Prediction
The 24hr chart shows USD/CHF retained enormous bullishness since bottoming at 0.9538, which matched a trend line. Meanwhile, the pair has moved beyond parity and nears its YTD peak.
Thus, USD/CHF will likely extend upside, with bulls targeting the crucial resistance zone of 1.0100. An action past the 1.0063 YTD peak will cancel the developing double-top setup.
Stay around for upcoming financial updates.