On Tuesday, the franc retreated against majors, including the dollar, on speculation the SNB would to raise the ceiling target against the euro to 1.25 from 1.20 on Wednesday. The SNB still insists to halt the franc’s rally where it referred earlier this month that the bank will enforce this minimum rate with the “utmost determination.”
On the other hand, the SNB lowered growth forecasts to 1.9% and 0.9% in 2011 and 2012 from the previously forecasted 2.1% and 1.5% in June, citing the impact of the franc’s surge on Swiss growth, thereby enhancing expectations that the SNB will continue its measures to halt the franc’s rally.
In the U.S., housing starts data showed a 5.0% drop in August from the prior 2.3% fall, adding to concerns that the sluggish growth pace would continue in the third quarter.
On Wednesday, The Swiss economy will start the day with the release money supply M3 for the year ending August at 07:00 GMT.
Thereafter, eyes will be on MBA mortgage applications for Sep. 16 at 11:00 GMT while will be followed by existing home sales at 14:00 GMT. Existing home sales report is predicted to advance 1.7% from the prior 3.5% drop. However, the main highlight of the day will be the FOMC rate decision due at 18:15 GMT.
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