SNB expected to hold the course

The Swiss franc is trading quietly in the Wednesday session. USD/CHF is currently trading at 0.9220, down 0.17% on the day.

Markets await FOMC decision

The Federal Reserve will be in the spotlight, as the FOMC holds an important policy meeting later today. We may see another twist in the taper-on-taper off saga, as expectations are running high that the Fed may signal that it will make an announcement at the November meeting as to whether it will commence tapering. Fed Chair Powell has stated on numerous occasions that there is no link between a decision to taper and a hike in rates. Still, the markets are keenly following any clues about rate movements, which makes the dot plot at today’s meeting a potential market mover. If the dot plot indicates that FOMC members have brought forward projections of a rate hike, the US dollar could get a significant lift in the North American session.

In sharp contrast to the FOMC meeting, the markets are not expecting any interesting developments at the SNB policy meeting on Thursday with regard to monetary policy. The SNB will maintain its deposit rate of -0.75% (the lowest of any major central bank) and there are no plans for any changes in policy. SNB Vice President Fritz Zurbruegg said in an interview earlier this month that the negative rate policy was essential to ensure that the Swiss franc does not appreciate and curb economic growth. Taking a page for the Fed’s playbook, Zurbruegg said that the spike in inflation was temporary, and he expected inflation to remain low in the medium term. For the SNB, it’s business as usual, despite other central banks hiking rates or moving in that direction.

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USD/CHF Technical

  • USD/CHF is testing support at 0.9216. Below, there is support at 0.9110
  • There is resistance at 0.9377, followed by resistance at 0.9432

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Kenny Fisher

Kenny Fisher

Market Analyst at OANDA
A highly experienced financial market analyst with a focus on fundamental analysis, Kenneth Fisher’s daily commentary covers a broad range of markets including forex, equities and commodities. His work has been published in several major online financial publications including Investing.com, Seeking Alpha and FXStreet. Based in Israel, Kenny has been a MarketPulse contributor since 2012.
Kenny Fisher

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