USD/CHF Holds Near Lows as Traders Await FOMC Minutes for Policy Clues

Key Moments

USD/CHF Edges Lower in Cautious Dollar Trade

The USD/CHF pair is trading modestly lower during the European session on Tuesday, slipping 0.12% to hover near 0.7880. The Swiss Franc is seeing mild demand as the US Dollar trades cautiously ahead of the release of the Federal Open Market Committee (FOMC) minutes from the December policy meeting, due in the late New York session.

The US Dollar Index (DXY), which tracks the performance of the Greenback against a basket of six major peers, is moving in a subdued manner around the 98.00 level as traders avoid taking large positions in a week characterized by thin volumes.

FOMC Minutes in Focus After Recent Rate Cut

Market participants are positioning around the upcoming FOMC minutes, which are expected to have a notable impact on the US Dollar, given the lack of other major releases this week. Investors are looking to the publication for additional insight into the Federal Reserve’s monetary policy outlook.

At the latest policy meeting, the Federal Reserve lowered its benchmark interest rate by 25 basis points to a target range of 3.50%-3.75%. Policymakers also signaled that they anticipate only one interest rate cut in 2026, a detail that traders will scrutinize further in the minutes for any nuance or divergence among committee members.

On the Swiss side, the Franc is trading nearly unchanged as market participants remain uncertain about the Swiss National Bank’s (SNB) potential policy decisions in 2026, adding another layer of ambiguity to the USD/CHF outlook.

USD/CHF Technical Picture: Bearish Bias Intact

On the daily chart, USD/CHF is quoted at 0.7884, with price action remaining below the 20-day Exponential Moving Average (EMA). The 20-day EMA is trending lower at 0.7940, reinforcing a downside bias and acting as a ceiling on any recovery attempts over recent sessions.

Momentum indicators also point to weakness. The 14-day Relative Strength Index (RSI) stands at 35.63, below the neutral 50 threshold, indicating soft momentum even after a modest rebound from earlier levels.

As long as the pair holds beneath the descending 20-day EMA, the technical bias remains bearish. This setup leaves the door open for further declines, with the price potentially moving toward the multi-year low near 0.7830.

(The technical analysis of this story was written with the help of an AI tool.)

FOMC Minutes: Event Details and Market Relevance

The FOMC, or Federal Open Market Committee, conducts 8 meetings per year to evaluate economic and financial conditions, set the stance of monetary policy, and assess risks to its long-term objectives of price stability and sustainable economic growth. The minutes from these meetings are published by the Board of Governors of the Federal Reserve and are considered an important guide to the future path of US interest rates.

Why the FOMC Minutes Matter for FX Traders

Minutes of the Federal Open Market Committee (FOMC) is usually published three weeks after the day of the policy decision. Investors look for clues regarding the policy outlook in this publication alongside the vote split. A bullish tone is likely to provide a boost to the greenback while a dovish stance is seen as USD-negative. It needs to be noted that the market reaction to FOMC Minutes could be delayed as news outlets don’t have access to the publication before the release, unlike the FOMC’s Policy Statement.