Ella 
In early Asian trading on Tuesday, USD/CHF consolidated around 0.8970. Meanwhile, the U.S. dollar index, which measures the greenback’s value against six other major currencies, faced some follow-through selling but remained above 105.10. The market prefers to wait and see before the Federal Reserve (Fed) and Swiss National Bank (SNB) announce their interest rate decisions on Wednesday and Thursday respectively.
The Federal Reserve (Fed) is scheduled to announce a two-day monetary policy meeting on Wednesday, and the market is widely expected to suspend interest rate hikes. The Fed is not expected to surprise markets, with a 99% chance of keeping rates unchanged. However, the probability of its November meeting fell below 30%, according to the CME FedWatch tool. This, in turn, could drag the dollar lower against its counterpart currencies and be bearish for the USD/CHF pair. Traders will be closely watching Federal Reserve Chairman Jerome Powell’s words at a news conference, which could provide clues about the Fed’s future direction of interest rates.
In Switzerland, the Swiss National Bank (SNB) is expected to raise interest rates by a further 25 basis points on Thursday, from 1.75% to 2%. Inflation in Switzerland was last at 1.6%, still below the 2% target, so the SNB is expected to continue its restrictive stance to ensure price stability.
In addition, US Secretary of State Antony Blinken met with Chinese Vice President Han Zheng on the sidelines of the United Nations General Assembly on Monday. The U.S. State Department said the two sides had “candid and constructive discussions.” Traders will be keeping a close eye on news surrounding U.S.-China relations. In other words, renewed U.S.-China trade war tensions could benefit the traditional safe-haven currency, the Swiss franc, and be negative for USD/CHF.
Later that evening, the Swiss trade balance, U.S. housing starts and U.S. building permits will be released. Ahead of Thursday’s Swiss National Bank meeting, market participants will be closely watching Wednesday’s Federal Reserve interest rate decision. These events could trigger market volatility and provide direction for USD/CHF.
