• USD/CHF remains composed in anticipation of the upcoming Fed policy decision.
• The US dollar remains sturdy as the Fed can be expected to keep interest rates steady in the 5.25%-5.50% range on Wednesday.
• The SNB is expected to leave interest rates unchanged in June.

The USD/CHF pair remains composed on tender trading as investors take a cautious stance ahead of the Federal Reserve’s (Fed) interest rate decision scheduled for Wednesday. On Tuesday morning in Europe, the pair oscillates around the level of 0.8950.

The Fed is expected to keep interest rates steady at a range of 5.25% to 5.50% as it seeks to limit inflation to its 2% target. Additionally, U.S. headline and core CPI data for May are estimated to show year-over-year growth of 3.4% and 3.5%, respectively.

Solid U.S. employment data for May reduced the likelihood of two Federal Reserve (Fed) rate cuts in 2024. The CME FedWatch Tool indicates that the likelihood of a Fed rate cut of at least 25 basis points in September has fallen to almost 49.0%. , up from 59.5% the week before.

In Switzerland, the consumer confidence index remained relatively unchanged at -38 in May compared to -38.1 in April and was below forecasts of -37. Traders are currently awaiting the Financial Stability Report from the Swiss National Bank (SNB), which will present an assessment of the stability of the banking sector and financial market infrastructure.

The Swiss National Bank (SNB) is unlikely to cut interest rates in June, despite inflation remaining below the 2% threshold. Earlier, SNB President Thomas J. Jordan warned against a diminutive risk of rising inflation expectations.