• USD/CHF retreats from intraday high but prints mild gains on a day.
• Swiss trade balance, import/exports print softer numbers for August.
• DXY snaps two-day downtrend amid hawkish Fed bets, ignores inflation expectations.
• SNB is up for 0.50% rate hike but Fed’s 75 bps rate lift appears mostly priced in.

USD/CHF remains mildly bid around 0.9655, after a sluggish week-start, as downbeat Swiss data joins the broad US dollar strength amid Tuesday’s Asian session. Also challenging the Swiss currency (CHF) pair buyers is the cautious mood ahead of the monetary policy decisions from the US Federal Reserve (Fed) and the Swiss National Bank (SNB).

That said, the Swiss Trade Balance eased to 3,424M in August versus 3,717M market forecasts and 3,522M previous readings. The details suggest that the Exports also dropped to 20,942M versus 22,242M while Imports slid to 17,519M versus 18,720M during the stated month.

Elsewhere, the US Dollar Index (DXY) prints the first daily gain of around 109.65-70 in three while tracking the Treasury yields. Also keeping the greenback on a firmer footing are the geopolitical fears surrounding China and Russia.

It should be noted that the downbeat US housing numbers and multi-day low of the US inflation expectations, as per the breakeven inflation rate of the St. Louis Federal Reserve (FRED), challenged the US dollar buyers earlier.

Against this backdrop, the S&P 500 Futures fade the previous day’s bounce off a two-month low around 3,920 whereas the US 10-year and 2-year Treasury yields remain sidelined at the highest levels since April 2011 and October 2007 in that order.

Moving on, Wednesday’s Federal Open Market Committee (FOMC) will be the first key catalyst for the USD/CHF pair amid the mostly priced-in 0.75 rate hike. With this, the US dollar’s further upside hinges on Fed Chair Jerome Powell’s speech and the economic forecasts. Following that, Thursday’s SNB’s 0.50% rate hike will unveil the first positive rate since late 2014, which in turn could help the CHF buyers to return.

Technical analysis

Monday’s Doji candlestick challenges USD/CHF buyers unless the quote provides a daily closing beyond the 100-DMA hurdle surrounding 0.9690.