USD/CHF aims 52-week high at 0.9470 despite a steady DXY

• USD/CHF is oscillating around 0.9400 ahead of the Fed’s policy meet.
• Investors are more focused on the extent of the interest rate hike by the Fed.
• The DXY is steady around 99.00 but may grind higher towards 100.00 amid a broader risk-aversion theme.

The USD/CHF pair is grinding higher amid a broader risk-aversion in the market. The major has witnessed a four-day winning streak and may continue the momentum if it manages to surpass Tuesday’s high at 0.9432.

The rising uncertainty over the interest rate decision from the Federal Reserve (Fed) is strengthening the greenback against the Swiss franc. The odds of a rate hike are at skyscrapers; however, investors are more focusing on the extent of the rate hike. Investors are in a dilemma whether the Fed will choose a 25 basis point (bps) and a ‘wait and watch approach for the monetary policies later this year or a 50 bps rate hike to tame the soaring inflation now.

If we consider the recent cues from Fed Chair Jerome Powell, a 25 bps rate hike is more likely as per his recent testimony. While recent print of the US Consumer Price Index (CPI) at 7.9% is dictating an aggressive hawkish story.

Meanwhile, the US dollar index (DXY) is gearing up for a fresh impulsive wave towards the psychological figure of 100.00 amid improving appeal for the safe-haven assets. The 10-year US Treasury yields have reclaimed 2.15% ahead of a likely tightening monetary policy on Wednesday.

Apart from the Fed Operation Market Committee (FOMC) meet, investors will also look for US Retail Sales, which are due on Wednesday. A preliminary estimate for the US Retail Sales is 0.4%, significantly lower than the prior print of 3.8%.