• USD/CHF gains in nominal terms as the Swiss franc is weighed down by uncertainty surrounding the SNB’s policy decision.
• The SNB is expected to cut interest rates for the third time in a row.
• Growing expectations of significant interest rate cuts by the Federal Reserve in November are putting pressure on the US dollar.

USD/CHF is slightly higher, near 0.8480 in Tuesday’s European session. Swiss franc assets are rising as the Swiss franc (CHF) weakens amid uncertainty ahead of the Swiss National Bank’s (SNB) interest rate decision on Thursday.

The SNB is widely expected to cut interest rates by 25 basis points (bps) to 1%. This would be the third consecutive quarter-to-percent rate cut, as inflation in the Swiss economy remains below the bank’s target of 2% from June 2023. In August, the annual consumer price index (CPI) fell further to 1.1%, the lowest level since April this year.

Meanwhile, Swiss franc assets are gaining despite a decline in the US dollar (USD) as rising concerns about job growth in the United States (US) fueled market expectations for a second consecutive 50 basis point cut in interest rates by the Federal Reserve (Fed) at its November meeting. The US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, is down to 100.80.

“The Federal Reserve will cut interest rates by another 50 basis points in November, a decision that will largely depend on incoming data, particularly the next monthly jobs report,” Citi strategists said.

Later this week, investors will be closely watching the U.S. Personal Consumption Expenditure Price Index (PCE) for August, which will be released on Friday. U.S. core PCE inflation, the Fed’s preferred inflation gauge, is expected to rise to 2.7% from 2.6% in July.