The USD/CHF currency pair pulled back from a 7-week high of 0.7923 on Monday ahead of the outcome of the Federal Reserve’s and the Swiss National Bank’s policy meetings.
The Fed is largely expected to leave its federal funds rate target range intact at 3.50%-3.75% at its March 17th-18th meeting, following three successive rate cuts last year.
In January, FOMC policy makers highlighted that economic activity had been expanding at a solid pace, job growth had remained slow, while inflation had remained somewhat elevated.
The minutes from the Federal Reserve’s January meeting showed that FOMC officials were divided over the future trajectory of interest rates. Several policy makers signaled that further rate cuts would likely be appropriate in case inflation continued to subside in line with their projections.
Others said that it might be prudent to keep the policy rate on hold for some time. Some FOMC members even argued that rate hikes could become necessary in case inflation remained elevated.
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 March 19th meeting.
Swiss inflation has remained subdued. The central bank had forecast average inflation at 0.2% for 2025, at 0.3% for 2026 and at 0.6% for 2027.
The SNB had also reaffirmed its readiness to intervene in the Forex market if needed.
The USD/CHF currency pair was last down 0.44% on the day to trade at 0.7874.
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