Understanding FOMC Minutes

The USD/CHF pair is trading around 0.7880, down 0.12% during the European session, as the market waits for the Federal Open Market Committee (FOMC) minutes. The US Federal Reserve recently lowered interest rates by 25 basis points to a range of 3.50%-3.75%. With the US Dollar Index around 98.00, traders are cautious ahead of the release. The FOMC minutes, coming out in a low-volume trading week, are essential for understanding the Federal Reserve’s future monetary policy. The Swiss Franc is stable, but there is some uncertainty regarding the Swiss National Bank’s 2026 plans. Technical analysis shows USD/CHF trading below the 20-day Exponential Moving Average (EMA) at 0.7940, indicating a bearish trend. The 14-day Relative Strength Index (RSI) is at 35.63, reflecting weak momentum. FOMC minutes are a crucial economic indicator that gives insight into US monetary policy and its potential effects on currency markets. Traders closely examine these minutes for hints about future policy, affecting the US Dollar’s movement based on whether the tone is seen as bullish or dovish. The financial community eagerly awaits this information for strategic decisions. As we approach December 30, 2025, the USD/CHF pair is weak around 0.7880. The focus must be on the upcoming release of the Federal Reserve’s December meeting minutes, especially after the recent interest rate cut to 3.50%-3.75%. Trading volumes are very low right now, which is typical for the end of the year during major holidays. In these low-liquidity situations, significant news from the FOMC minutes can lead to sharp price shifts. Historical data suggests that volatility in major currency pairs can jump over 30% during this time due to unexpected news.

Strategy in Low Liquidity Conditions

With the bearish trend in mind, we should consider buying put options on USD/CHF. This strategy lets us profit from a potential drop in the pair’s value, targeting the multi-year low of 0.7830. The risk in this trade is limited to the premium paid for the option, providing a defined-risk approach during an uncertain week. The Fed’s dovish outlook is backed by recent economic data, which will likely be included in the minutes. For instance, the latest U.S. Core PCE Price Index, the Fed’s preferred measure of inflation, fell to 2.8% year-over-year in November. Additionally, job growth has slowed, with recent Non-Farm Payrolls showing a modest increase of 165,000, further supporting the case for lower rates. Conversely, the Swiss National Bank poses a wildcard, adding uncertainty to the Franc’s future. Although Swiss inflation is lower than in other nations, it stood at 1.5% in the latest report, which might prevent the SNB from signaling rate cuts soon. The contrasting policies of the Fed and SNB add more downward pressure on the USD/CHF pair. The technical picture reaffirms this bearish outlook, as the price remains below the 20-day EMA at 0.7940. This level serves as key resistance; if the price fails to break above it, it indicates that sellers still dominate. For option traders, strike prices below 0.7850 for January expirations appear increasingly appealing. Looking back, we saw a similar downward trend in 2023, with the pair declining from above 0.9400 to below 0.8400. This was driven by changing expectations about Fed policies versus the actions of the SNB. Historical patterns suggest that once these trends take hold in USD/CHF, they can be powerful and persistent. Create your live VT Markets account and start trading now.

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