USD/CHF Price Forecast: Corrects to near 0.8630 despite upbeat US Dollar

USD/CHF drops to near 0.8630 even though the US Dollar resumes its upside journey.

The SNB is expected to cut interest rates again in December.

Investors expect the Fed to reduce interest rates gradually.

The USD/CHF pair drops to near 0.8630 from the two-month high of 0.8370 in Monday’s North American session. The Swiss Franc pair corrects even though the US Dollar (USD) rebounds after a mild sell-off on Friday, suggesting sheer strength in the Swiss currency.

Investors have underpinned the Swiss Franc against the Greenback despite the Swiss National Bank (SNB) is expected to cut interest rates again in December. This would be the fourth straight interest rate cut in a row.

The US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, bounces back to near 103.70 and aims to extend its upside above the 11-week high around 104.00. The appeal of the Greenback has strengthened as investors expect the Federal Reserve (Fed) to cut interest rates at a moderate pace.

According to the CME FedWatch tool, the Fed is expected to cut interest rates by 25 basis points (bps) in November and December. Earlier, traders were anticipating the Fed to deliver a larger-than-usual rate cut of 50 bps in November. However, they priced out the scenario after a slew of upbeat United States (US) economic data for September.