USD/CHF languishes near multi-week low, around 0.9600 ahead of Fed rate hike decision

• USD/CHF witnessed some selling on Wednesday amid modest USD weakness.
• The upbeat US economic data fails to impress the USD bulls or lend support.
• The downside seems cushioned ahead of the much-awaited FOMC decision.

The USD/CHF pair edges lower during the early North American session and is now flirting with the daily low, around the 0.9600 round-figure mark, or a multi-week low set on Monday.

The US dollar creeps lower on Wednesday amid some repositioning trade ahead of the highly-anticipated FOMC monetary policy decision. This is turning out to be a key factor exerting some pressure on the USD/CHF pair for the second successive day. The intraday downtick seems unaffected by better-than-expected US macro data.

The US Census Bureau reported that headline Durable Goods Orders increased by 1.9%, surpassing expectations for a 0.4% decline by a big margin. Orders excluding transportation items also came in higher than consensus estimates and rose 0.3% during the reported month. The data, however, did little to impress the USD bulls.

That said, a combination of factors might offer some support to the USD/CHF pair and help limit the downside, at least for the time being. A goodish recovery in the global risk sentiment - as depicted by a generally positive tone around the equity markets - could undermine the safe-haven Swiss franc and act as a tailwind for spot prices.

Investors also seem reluctant and are preferring to wait for the outcome of a two-day FOMC policy meeting, scheduled to be announced later during the US session. The Fed is expected to raise rates by at least 75 bps and leave the door open for further tightening, though the markets remain divided over the need for more aggressive hikes.

Hence, the market focus would remain glued to the accompanying monetary policy statement and Fed Chair Jerome Powell's comments at the post-meeting press conference. Investors would look for fresh clues about the Fed's near-term policy outlook, which, in turn, would influence the USD and determine the near-term trajectory for the USD/CHF pair.

Technical levels to watch