USD/CHF attempts a rebound at around 0.9610, DXY turns volatile ahead of Fed policy

• USD/CHF is hoping for a rebound at around 0.9610 on expectations of an interest rate hike by the Fed.
• Expectations for higher job additions in the US economy have trimmed dramatically.
• Real Retail Sales in the Swiss economy are expected to soar amid costly fossil fuels.

The USD/CHF pair has attracted some bids around 0.9610 after slipping minutely below Tuesday’s low. The less-reactive asset is displaying topsy-turvy moves as the US dollar index (DXY) is misbehaving with the ultra-short-term investors ahead of the Federal Reserve (Fed) monetary policy meeting.

It is worth noting that the DXY has not displayed a sheer upside move before the interest rate policy like the prior three monetary policy announcements. The DXY was gaining like there is no tomorrow, however, this time a downward estimate from a 1% rate hike to 75 basis points (bps) has weakened the DXY bulls.

Accelerating odds of a recession in the US economy are responsible for the subdued performance of the DXY. Expectations for higher job additions have trimmed dramatically as big tech boys are halting their recruitment process and are also pursuing a lay-off program this year. Adding to that, higher price pressures won’t get offset led by lower Nonfarm Payrolls (NFP) and wage rates.

Apart from the Fed policy, investors will also keep an eye on US Durable Goods Orders data. A preliminary estimate for the economic data is -0.4%, significantly lower than the prior release of 0.8%. Investors should be aware of the fact that the US Retail Sales were upbeat and the other economic data is expecting a slippage. There is no denying the fact that Retail Sales were majorly driven by soaring price pressures.

On the Swiss franc front, Friday’s Real Retail Sales will hog the limelight. Earlier, the economic data landed at -1.6%. The economic catalyst is expected to remain higher as soaring energy bills and prices of food products will elevate Real Retail Sales. However, a slippage in the economic data will indicate a major slump in the overall demand. This may weaken the Swiss franc bulls ahead.