The USD/CHF pair held firm near a two-week high around 0.8050 during Monday’s Asian session, supported by a resilient US dollar (USD) as expectations for further Federal Reserve (Fed) rate cuts this year continued to fade.
The pair’s strength reflects improving confidence in the greenback, which has been bolstered by a cautious Fed stance and lingering inflation concerns.
Fed officials temper expectations for December rate cut
The US Dollar Index (DXY), which measures the USD against a basket of six major currencies, traded near 99.85 at the time of writing.
Dovish market bets have eased after the Fed reduced interest rates by 25 basis points to a range of 3.75% 4.00% last week, marking the second cut of the year. While the move was primarily driven by labor market concerns, officials have since expressed renewed caution over inflation risks.
Fed Chair Jerome Powell reiterated that another rate cut in December is “far from a foregone conclusion,” signaling a wait-and-see approach. According to the CME FedWatch Tool, markets now price a 69.3% probability of another 25-basis-point cut next month, down sharply from 91.7% a week earlier.
US data and Swiss CPI in focus
Investors are closely watching upcoming macroeconomic releases for fresh direction. The US ISM Manufacturing Purchasing Managers’ Index (PMI) for October, due at 15:00 GMT, is expected to tick slightly higher to 49.2 from 49.1 in September, indicating continued contraction in the manufacturing sector but at a slower pace.
Meanwhile, attention in Switzerland turns to the October Consumer Price Index (CPI) report, scheduled for release at 07:30 GMT.
The data is expected to show a third consecutive monthly decline, with prices projected to fall 0.1% compared to a 0.2% drop in September. On an annual basis, CPI is forecast to rise modestly by 0.3%, up from 0.2% previously.
Technical outlook
From a technical perspective, USD/CHF remains well supported above the 0.8000 psychological level, with short-term momentum favoring further upside.
The next resistance zone is seen near 0.8080, followed by 0.8120. A sustained move above these levels could reinforce the bullish outlook and open the path toward 0.8180. On the downside, initial support lies at 0.8020, followed by 0.7980 and 0.7940.
