USD/CHF HOLDS POSITION ABOVE 0.8450 AFTER PARING GAINS, SWISS TRADE BALANCE DATA EYED

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  • USD/CHF maintains its position as the US Dollar appreciates after post-meeting comments from Fed’s Chair Powell.
  • Fed’s Powell stated that 50 basis point rate cuts are not the “new pace”.
  • The solid CHF leads to speculation of the SNB implementing a significant rate cut in 2024.

USD/CHF holds its gains around 0.8480 during Thursday’s Asian hours following a volatile session on Wednesday due to the US Federal Reserve’s (Fed) interest rate decision. Despite the Fed’s aggressive 50 basis point (bps) rate cut, the US Dollar (USD) recovered its daily losses due to the remarks made by Fed Chair Jerome Powell.

In the post-meeting press conference, Fed’s Powell stated that the central bank is not in a hurry to ease policy and emphasized that half-percentage point rate cuts are not the "new pace”. Furthermore, he commented on the aggressive 50 basis point rate cut, saying, “This decision reflects our increased confidence that, with the right adjustments to our policy approach, we can maintain a strong labor market, achieve moderate economic growth, and bring inflation down to a sustainable 2% level.”

Fed policymakers updated their quarterly economic forecasts, raising the median projection for unemployment to 4.4% by the end of 2024, up from the 4.0% estimate in June. They also increased their long-term projection for the federal funds rate from 2.8% to 2.9%, per Moneyweb.



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