USD/CHF hovers around 0.9780 on Fed’s rate hike expectations, Swiss CPI in focus

• USD/CHF oscillates around 0.9780 ahead of the interest rate decision by the Fed.
• The DXY has slipped below 103.60 as profit-booking kicks in.
• A higher reading of SNB’s inflation at 2.6% may turn SNB into a slightly hawkish mood.

The USD/CHF pair is performing lackluster in the Asian session as the asset is displaying back and forth moves in a narrow range of 0.9763-0.9783 ahead of the monetary policy by the Federal Reserve (Fed) on Wednesday. An eight-day winning streak is not displaying any signs of exhaustion in the asset, which favors greenback bulls and signals more upside.

Uncertainty over the rate hike decision by the Fed has paused the Fx domain as the market participants have underpinned a ‘wait and watch’ approach ahead of the monetary policy announcement. An interest rate elevation by 50 basis points (bps) looks imminent as announced at the International Monetary Fund (IMF) meeting by Fed chair Jerome Powell last month. Also, multi-decade inflation and a tight labor market are fulfilling the specifications for a jumbo rate hike.

Meanwhile, the US dollar index (DXY) has slipped below 103.60 firmly after consolidating in a minor range of 103.58-103.66. Profit-booking at elevated levels has dragged the asset lower however, a broad-based strength is still intact.

On the Swiss front, investors are eyeing the release of the Consumer Price Index (CPI), which is due on Thursday. The Swiss National Bank (SNB) is expected to sound slightly hawkish in upcoming conversations as the Swiss Federal Statistical Office is expected to report the yearly inflation at 2.6%, higher than the prior print of 2.4%.