- USD / CHF is witnessing moderate and limited price action within a range during the European session.
- The market reacts shortly after the SNB announced its monetary policy decision on Thursday.
- The risk appetite and the optimistic bent of the Fed support the prospects for some short-term rally.
The pair USD / CHF has remained stable near 0.9250 at the beginning of the European session and has moved shortly after the Swiss National Bank (SNB) announced its monetary policy decision.
The pair has struggled to capitalize on the previous day’s post-FOMC bounce, from the 0.9215 region, and has moved between tepid gains and minor losses during the first half of trading action on Thursday. The US dollar has retreated a bit from the month-long highs reached in reaction to the optimistic tilt from the Fed the day before. and it has acted as a headwind for the USD / CHF pair.
Nevertheless, the risk appetite prevailing in the markets has continued to weigh on the demand for the safe haven Swiss franc and it has helped limit the decline for the USD / CHF pair. Investors seem unimpressed by the fact that the members of the SNB board of directors decided to leave the monetary policy configuration unchanged in the evaluation of the monetary policy of the September quarter this Thursday.
In the meantime, the Fed indicated that the moderation in the pace of asset purchases could soon be justified if economic progress continues broadly as expected. Additionally, Fed Chairman Jerome Powell added that pandemic-era asset purchases could come to a complete halt by mid-2022. In addition to this, the dotted chart revealed a growing inclination to increase interest rates in 2022.
This should help reignite demand for the USD and support the prospects for some near-term bullish movement in the USD / CHF pair. Therefore, any significant drop could still be seen as a buying opportunity and remain limited. Investors are now awaiting the US economic calendar, with weekly jobless claims and preliminary PMI numbers released for further momentum.
USD / CHF technical levels