USD/CHF traded near 0.7717 on Wednesday, up 0.20% on the day. It held above 0.7700 and stayed inside the same tight weekly range.
Trading volumes were light ahead of the release of minutes from the latest Federal Reserve meeting. The Fed kept its benchmark rate unchanged at 3.50%–3.75%, and markets are watching the minutes for hints about the next policy move.
Fed Minutes In Focus
Market pricing still suggests several rate cuts this year if inflation keeps cooling. Fed officials, including Chicago Fed President Austan Goolsbee, have said any cuts will depend on incoming data such as GDP and the PCE Price Index.
In Switzerland, this week’s calendar is quiet. The Swiss Franc has stayed weak after softer CPI data. Inflation has been near the lower end of the Swiss National Bank’s target range. That has raised expectations that policy will stay loose, and that negative rates could return.
With USD/CHF trading calmly around 0.8850, volatility remains low as markets wait for the Fed minutes. The narrow range shows many traders are avoiding big positions until they have more clarity. In short, the market is waiting for a clear trigger.
The Fed is widely expected to keep rates steady, especially after the latest US inflation report came in slightly hotter at 2.9% and the labor market added a strong 225,000 jobs last month. Traders will look for any wording in the minutes that points to when rate cuts could begin later this year. Until then, the pair may stay stuck in place.
This setup is similar to what we saw in early 2025, when the Fed held rates at 3.50%–3.75%. At that time, markets also studied every official comment to guess when easing would start. The same pattern is back: macro data is driving expectations.
Swiss Franc Policy Divergence
The Swiss Franc is also under pressure because Swiss inflation is still falling, recently reaching 1.2%. That keeps the Swiss National Bank on track to be one of the first major central banks to cut rates, possibly as soon as next month. This gap between a cautious Fed and a more dovish SNB gives USD/CHF underlying support.
For derivatives traders, low implied volatility may offer an opportunity. Buying options—such as a long straddle—can position for a sharp move after the Fed minutes. This approach can benefit from a breakout in either direction, without needing to predict what the minutes will say.
Create your live VT Markets account and start trading now.
here to set up a live account on VT Markets now
