• USD/CHF remains feeble near 0.8450 as traders raise the Fed 50 bps interest rate cut for Wednesday’s meeting.
• Investors expect the Fed to cut interest rates by 100 bps this year.
• The SNB is expected to cut its key borrowing rates for the third time in a row.

The USD/CHF pair extends its losing streak for the fourth trading session on Tuesday. The Swiss Franc asset remains sluggish near 0.8450 as the US Dollar (USD) continues to face selling pressure due to growing market expectations that the Federal Reserve (Fed) will deliver a 50 basis points (bps) interest rate cut on Wednesday.

The prospects for the Fed to begin reducing interest rates aggressively have been prompted by a sharp decline in the annual United States (US) headline Producer Price Index (PPI) data for August released last week. The underlying inflation decelerated at a faster-than-expected pace to 1.7%.

Investors will also focus on the Fed’s dot plot and economic projections. The Fed dot plot indicates where policymakers see the Federal fund rate heading in the medium and long term. According to the CME FedWatch tool, the Fed will cut interest rates by 100 bps by year-end.

Meanwhile, the Swiss Franc (CHF) remains firm even though market participants see the Swiss National Bank (SNB) reducing interest rates again later this month. The SNB has already cut its key borrowing rates by 50 bps this year to 1.25%.