USD/CHF eases below 0.9250 on SNB sovereign wealth fund chatters, Fed in focus

• USD/CHF snaps two-day uptrend, mildly offered around intraday low of late.
• Economists push SNB to create $1.0 trillion sovereign wealth fund.
• Market sentiment dwindles ahead of the Fed as Omicron and inflation fears battle stimulus hopes.

USD/CHF grinds higher after a two-day uptrend, teases intraday low around 0.9235 during Wednesday’s Asian session.

The Swiss currency pair’s latest declines could be linked to the market chatters over the push for the Swiss National Bank (SNB) to create a sovereign wealth fund. Also weighing on the quote could be the cautious mood ahead of today’s Federal Open Market Committee (FOMC).

“The Swiss National Bank should convert its massive pile of foreign stocks and bonds into a sovereign wealth fund like Norway's to support government spending, a group of economists said,” per Reuters.

On the other hand, a drop in the US inflation expectations, as measured by the 10-year breakeven inflation rate per the St. Louis Federal Reserve (FRED) data, to an 11-week low contradicts record high Producer Price Index (PPI) for November. The same propel the market’s anxiety ahead of the key Fed meeting.

While portraying the market mood, the US 10-year Treasury yields fade the previous day’s rebound from weekly low whereas the S&P 500 Futures print mild gains at the latest.

That said, USD/CHF traders will wait for the Fed’s action amid hopes of faster tapering and rate hike hints. However, the Omicron woes challenge the hawks.

Read: Fed Interest Rate Decision Preview: Can the FOMC satisfy and mollify the markets?

Technical analysis

An ascending triangle formation restricts short-term USD/CHF moves between 0.9280 and 0.9190 as MACD and RSI tease bulls.