Investors Remain Cautious Ahead Of The Fed’s Decision, USD/CHF Hovers Around 0.8950

USD/CHF was trading sideways against the US dollar in low liquidity during early European trading on Wednesday. The Swiss franc found support against the dollar as the Swiss National Bank is unlikely to cut interest rates in June. Earlier, SNB Chairman Thomas J. Jordan warned that inflation expectations face a slight upside risk.

Traders are looking forward to the Swiss National Bank’s Financial Stability Report on Thursday, which will assess the stability of the banking sector and financial market infrastructure. In addition, producer prices and import prices will also be in focus.

The US dollar (USD) remained stable ahead of the Federal Reserve’s (Fed) policy decision on Wednesday. The Fed is expected to keep interest rates stable between 5.25%-5.50% to curb inflation and achieve its 2% target.

Strong US employment data in May reduced the probability of a September rate cut by the Federal Reserve. The CME FedWatch tool showed that the probability of a September rate cut by the Federal Reserve of at least 25 basis points fell to 52% from 67% a week ago.

Investors will also watch key US inflation data released later in the North American session. The US headline and core CPI figures for May are expected to show year-over-year growth of 3.4% and 3.5%, respectively.

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