USD/CHF hovers above 2-week low ahead of Fed and SNB

The USD/CHF currency pair hovered above a 2-week low of 0.7910 on Wednesday 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 June 16th-17th meeting, following three successive rate cuts last year.

The minutes of the Federal Reserve’s April policy meeting showed that most officials judged additional policy firming would likely be warranted if inflation continued to run persistently above the 2% objective.

Policy makers broadly agreed that inflation risks were tilted to the upside and acknowledged that developments in the Middle East could significantly shift the balance of risks and complicate the appropriate policy path.

Although the US and Iran have agreed to a provisional peace deal, oil prices are still holding above pre-war levels.

Market participants will be scrutinizing the subsequent press conference for indications of how newly installed Fed Chair Kevin Warsh plans to steer the central bank in the period ahead.

They will also be paying close attention 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 June 18th meeting.

Low inflation has given policy makers room to stay cautious. Annual consumer price inflation in Switzerland held at 0.6% in May. While this print matched the prior reading and represented the highest level since late 2024, it fell short of the 0.8% consensus estimate, prompting market participants to reassess the likelihood of a near-term SNB rate hike.

The SNB’s latest projections point to average inflation of 0.5% in 2026 and 2027, and of 0.6% in 2028. This suggests that policy makers see little need for tighter policy.

The SNB has also reaffirmed its readiness to intervene in the Forex market if needed.

The USD/CHF currency pair was last down 0.07% on the day to trade at 0.7918.