The USD/CHF currency pair pulled back from a 2-week high of 0.8085 on Wednesday ahead of the outcome of the Federal Reserve’s and the Swiss National Bank’s policy meetings.
The Fed is widely expected to lower its federal funds rate target range by 25 basis points to 3.50%-3.75% at its December meeting.
The Federal Reserve cut interest rates by 25 basis points to 3.75%-4.00% in October, bringing borrowing costs to their lowest level since 2022.
Fed policy makers highlighted increasing downside risks to employment in recent months, while inflation has remained elevated.
The minutes from the Federal Reserve’s October meeting revealed that interest rates had been lowered even as policy makers cautioned that such a move could risk entrenched inflation and a loss of public trust in the financial institution.
Investors will also be paying close attention to the press conference with Fed Chair Jerome Powell for clues over the timing of future interest rate cuts as well as to the new set of FOMC economic forecasts.
Meanwhile, the Swiss National Bank is expected to keep its policy rate without change at 0% at its December 11th meeting.
Consumer prices in Switzerland have remained flat year-on-year in November, after rising 0.1% in October.
The central bank had forecast average inflation at 0.2% for 2025, at 0.5% for 2026 and at 0.7% for 2027.
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