• USD/CHF fades bounce off one-week low ahead of Swiss National Bank Monetary Policy announcements.
• Fed’s dovish rate hike drown US Dollar even as Chairman Powell, US Treasury Secretary Yellen offered corrective bounce afterward.
• SNB is likely to announce 0.50% rate hike but Monetary Policy Assessment will be crucial to watch amid banking crisis.

USD/CHF retreats to 0.9173, following the Federal Reserve (Fed) induced slump to one-week low, as traders prepare for the Swiss National Bank (SNB) announcements during early Thursday.

On Wednesday, US Federal Reserve (Fed) matched market forecasts and announced 0.25% rate hike but failed to propel the US Dollar as the Fed statement mentioned “some additional policy firming may be appropriate,” instead of “ongoing increases in the target range will be appropriate”. Fed Chair Jerome Powell, however, tried to tame the rate cut hopes by saying that officials do not see rate cuts for this year, which in turn allowed breathing space to the greenback bears in the last.

Apart from the Fed announcements, US Treasury Secretary Janet Yellen’s comments also allowed the US Dollar Index to rebound from a seven-week low, by way of challenging the risk appetite, as she ruled out considering “blanket insurance” for bank deposits. 

Against this backdrop, Wall Street closed in the red but yields and the US Dollar Index (DXY) both closed in the red.

Looking ahead, the Swiss National Bank’s (SNB) Interest Rate Decision is the key for the USD/CHF pair traders to watch as the bank is likely to announce a dovish hike considering the latest banking sector fallouts, mainly surrounding Credit Suisse. Should the SNB accepts challenges to the economic outlook from the latest banking sector turmoil, the USD/CHF may pay recent losses.

Apart from the SNB, the second-tier US data relating to activities and jobs will also be important to watch for clear directions.

Technical analysis

A sustained break of the 50-DMA, around 0.9255 by the press time, directs USD/CHF towards the 0.9100 threshold but multiple lows marked near 0.9085 and 0.9070 can probe the bears afterward.