The Swiss National Bank is widely expected to cut its key policy rate by a further 25 basis points later today, and Swiss Franc traders are preparing for currency movements as the market adjusts to the latest update. Some market analysts believe that a larger rate cut would be appropriate, given weak inflation data. However, with the rate already at 1%, the majority feel it would be prudent to preserve additional room for further cuts in 2025.
The expectation is for forward guidance from the bank to remain dovish. Analysts will closely monitor both the statement and updates during the press conference to assess the extent of easing anticipated in 2025, with many speculating that rates could return to zero. USD/CHF is currently positioned in the middle of its recent ranges, but traders expect one of the levels to be tested in the coming days. A more dovish stance than expected would likely lead to a swift test of topside resistance just above 0.8900, whereas a less dovish tone could see the pair drop towards trendline support, currently around 0.8760.
Resistance 2: 0.8957 – November High
Resistance 1: 0.8927 – Trendline Resistance
Support 1: 0.8760 – Trendline Support
Support 2: 0.8734 – December Low
