- USD/CHF continues to fluctuate in a narrow range.
- US Dollar Index stays directionless around 90.50 on Wednesday.
- Focus shifts to FOMC’s policy announcements and dot plot.
After failing to hold above 0.9000 on Tuesday, the USD/CHF pair closed in the negative territory and seems to be having a difficult time regaining its traction on Wednesday. As of writing, the pair was up 0.13% on the day at 0.8992.
Fed set to leave policy settings unchanged
With investors staying on the sidelines ahead of the FOMC’s policy announcements, the US Dollar Index (DXY) continues to move sideways around 90.50 for the third straight day. Meanwhile, Tuesday’s mixed macroeconomic data releases from the US failed to provide a directional clue to the USD.
The Federal Reserve is expected to keep its policy settings unchanged following the June policy meeting. However, investors will keep a close eye on the Summary of Economic Projections to see if there is a hawkish shift in policymakers’ rate outlook.
Previewing this event, “median projections for core inflation in 2022/2023 will probably rise slightly, consistent with a sizable revision to 2021 being viewed as largely reflecting transitory factors,” noted TD Securities analysts. “The median dot will probably show a rate hike by end-23. A less dovish Fed tone next week would help to stabilize the USD in the very short run.”
Federal Reserve Preview: Forecasts from 11 major banks, eyeing any hints of tapering.
Technical levels to watch for