The Swiss franc weakened against other major currencies in the Asian session on Wednesday, as traders speculate that the central bank is likely to reduce its borrowing costs in the policy meeting due Thursday.

The policy board of the Swiss National Bank (SNB) governed by Thomas J. Jordan is expected to lower the rate by a quarter-point to 0.75 percent.

Investors await key U.S. inflation readings and the ECB rate decision.

The closely watched report on U.S. consumer price inflation is due later in the day.

The report is expected to show U.S. consumer prices rose by 0.2 percent for the fifth straight month in November. The annual rate of consumer price growth is expected to tick up to 2.7 percent from 2.6 percent in October.

Core consumer prices, which exclude food and energy prices, are expected to increase by 0.3 percent for the fourth straight month while the annual rate of core consumer price growth is expected to remain at 3.3 percent.

The CPI report along with the release of producer price inflation figures on Thursday might impact the outlook for U.S. interest rates.

According to CME Group's FedWatch Tool, markets currently price in an 85 percent chance of a Fed rate cut next week.

Whatever the policy decision, there is much uncertainty regarding what could happen to Fed interest rates next year.

Markets have also fully priced in a 25-bps rate cut by the European Central Bank and a 50-bps cut from the Swiss National Bank on Thursday.

In the Asian trading today, the Swiss franc fell to nearly a 1-month low of 1.1286 against the pound, from Tuesday's closing value of 1.1268. The franc may test support near the 1.13 region.

Against the U.S. dollar, the euro and the yen, the franc slipped to a 6-day low of 0.8838, a 5-day low of 0.9305 and a 2-day low of 171.46 from yesterday's closing quotes of 0.8825, 0.9289 and 172.06, respectively. If the franc extends its downtrend, it is likely to find support around 0.89 against the greenback, 0.93 against the euro and 168.00 against the yen.

Looking ahead, U.S. MBA mortgage approvals data, U.S. CPI data for November, U.S. EIA crude oil data and U.S. monthly budget statement are slated for release in the New York session.

At 9:45 am ET, the Bank of Canada will announce its interest rate decision. The BoC is expected to lower the benchmark rate by 50 basis points, following the same action in October, to 3.25 percent.

Following the announcement of the BoC monetary policy decision, the BoC Governor Tiff Macklem will deliver a speech in a press conference at 10:30 am ET.

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