USD/CHF holds below 0.8450 as investors bet on 50 bps rate cut

• USD/CHF edges lower to near 0.8440 in Tuesday's Asian session. 
• The US Dollar remains under pressure amid dovish Fed. 
• Economists see the SNB cut rates by another quarter-point cut on September 26. 

The USD/CHF pair trades in negative territory for the fourth consecutive day around 0.8440 during the early European session on Tuesday. The rising expectation that the US Federal Reserve (Fed) will cut a larger interest rate at its upcoming monetary policy meeting on Wednesday weighs on the US Dollar (USD). Ahead of the key event, the US Retail Sales for August are due on Tuesday. 

The USD traded near the lowest levels of the year in the previous session as markets are betting on an outsized rate cut by the Fed. Fed Chair Jerome Powel said last month at the Jackson Hole that inflation had come under control just enough for the Fed to finally feel comfortable dialing back policy. 

The Federal Reserve is widely anticipated to cut the interest rate at its September on Wednesday, the first time in four years. Investors will also take more cues from interest rate projections, known as the "dot plot". The expectation of aggressive rate cuts might continue to undermine the Greenback in the near term. 

On the Swiss front, economists forecast the Swiss National Bank (SNB) will lower rates by another quarter-point cut on September 26, Markets are now pricing in a roughly one-in-three chance, up from zero just a month ago, per Bloomberg. Meanwhile, the ongoing geopolitical tensions in the Middle East could boost the safe-haven demand, benefitting the Swiss Franc (CHF). Israeli Prime Minister Benjamin Netanyahu said on Sunday that Yemen's Houthis will pay a "heavy price" after a missile fired by the group landed in central Israel, according to the BBC.