USD/CHF: SNB Rate Cut Expected
The USD/CHF pair is holding steady around 0.8500 as investors anticipate the Swiss National Bank (SNB) to announce a 25 basis point rate cut later today. Here’s what you need to know:
Market Expectations
- Market participants predict a 63% chance of a 25 basis point rate cut by the SNB.
- There’s also a 37% chance of a larger rate cut.
Swiss Economic Outlook
The ZEW Swiss Survey Expectations for September show a decrease of 5.4 points, indicating growing pessimism about the Swiss economy’s growth prospects in the next six months.
Impact on USD
The USD is under pressure due to expectations of further rate cuts by the US Federal Reserve (Fed). The CME FedWatch Tool suggests a 50% chance of a total 75 basis points cut by the end of 2024.
Fed’s Stance
Federal Reserve Governor Adriana Kugler has expressed support for rate cuts, stating that additional cuts may be necessary if inflation continues to ease.
Upcoming Event
Keep an eye on the release of the final US GDP Annualized for Q2 later today, which could impact the USD/CHF pair.
Economic Indicator: SNB Interest Rate Decision
The SNB announces its interest rate decision after each of its quarterly meetings. Here’s what you need to know:
- If the SNB is hawkish and raises rates, it’s bullish for the CHF.
- If the SNB has a dovish view and keeps rates unchanged or cuts them, it’s bearish for the CHF.
Next release: Thu Sep 26, 2024 07:30
Consensus: 1%
Previous: 1.25%
Source: Swiss National Bank
Analysis
The USD/CHF pair is in focus as investors await the SNB’s rate decision. The expected rate cut could weigh on the CHF, while the USD is also facing pressure from potential Fed rate cuts. Traders should watch for the US GDP data release, which could further impact the currency pair.