USD/CHF extends gains, nearing 0.8200 with all eyes on the Federal Reserve   

• The US extends gains for the fourth consecutive day and is nearing 0.8200.
• Fears of an escalation of the Middle East conflict are keeping the US Dollar buoyed.
• Investors are looking at the Fed for more clues about the bank's monetary policy plans.
  

The US Dollar is heading higher for the fourth consecutive day on Wednesday. The pair has rallied about 1.5% from last week lows at 0.8050 to return to the upper range of the 0.8100s as the market braces for the Fed's monetary policy decision..

The Dollar has been drawing support from the risk-averse sentiment this week, in a rush for safety, with investors increasingly weary that the IS-Iran war escalates with the involvement of the US.

On Tuesday, US President Trump's comments demanding the unconditional surrender of the Iranian authorities and his veiled threats to kill the Islamic Republic's supreme leader Ali Jamenei crushed appetite for risk and sent the US Dollar higher across the board.

The Swiss calendar is void on Wednesday, and all eyes will be on the Fed's monetary policy decision, more specifically on Chairman Powell's comments and on the bank's monetary and interest rate projections.

Investors will be eager to know if the soft US data seen recently has prompted the bank to consider any further interest rate cuts over the coming months. Markets are expecting two more rate cuts this year, with the first one coming in September, and will be eager to see some confirmation of these views.