The USD/CHF pair edges lower to near 0.8820 amid the decline of US Dollar (USD) during the early European session on Wednesday. The safe-haven flows and Federal Reserve (Fed) rate cuts expectation in September are like to drag the pair lower. Investors await Fed interest rate decision on Wednesday for fresh catalysts. 

The Fed's benchmark rate is anticipated to hold interest rates steady at a 23-year high of 5.25% to 5.5% at its upcoming meeting on Wednesday. ‘’Market focus is on the upcoming Fed policy meeting on Wednesday, July 31, 2024. No changes are expected, but the view of a potential rate cut in September increases the probability of dollar weakness,'' said Jateen Trivedi, VP Research Analyst, Commodity and Currency, LKP Securities. 

The Fed Chair Jerome Powell’s remarks from the press conference might offer some hints about rate cut bets in September. Dovish comments from Powell might continue to undermine the Greenback broadly.

On the other hand, the Swiss Franc (CHF) might benefit from the safe-haven flows amid economic uncertainty and further Middle East geopolitical tensions. The Washington Post reported that Israel carried out an airstrike on a densely populated neighborhood on the outskirts of the Lebanese capital on Tuesday, claiming that it killed a top Hezbollah commander responsible for the deaths of 12 children over the weekend in the Israeli-occupied Golan Heights.

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