USD/CHF extends its winning streak into a seventh consecutive session, trading around 0.8080 during Monday’s Asian session. However, the pair’s upside may be limited as the Swiss Franc (CHF) finds support from expectations that the Swiss National Bank (SNB) will refrain from cutting interest rates in December amid forecasts for rising inflation.
The CHF may also draw strength from a new tariff agreement between the Swiss government and the Trump administration, which reduces US tariffs from 39% to 15%. The deal is expected to help the Swiss economy rebound after tariff-related weakness in Q3.
Meanwhile, the US Dollar (USD) is facing renewed pressure as markets increase their bets on a December Federal Reserve (Fed) rate cut. According to the CME FedWatch Tool, the probability of a 25-basis-point cut next month has climbed to 69%, up from 44% a week earlier.
New York Fed President John Williams said Friday that policymakers remain open to rate cuts in the “near-term,” reinforcing expectations for a December move. Fed Governor Stephen Miran added that recent Nonfarm Payrolls data supports a cut, noting he “would vote for a 25 bps cut” if decisive. However, Boston Fed President Susan Collins struck a more cautious tone, saying she has not yet reached a decision on whether further easing is appropriate.
