The USD/CHF currency pair has extended gains to around 0.8770 in early European trading on Monday, marking its highest level since August. This rise is supported by a strong US dollar amid market anticipation of upcoming US inflation data and Federal Reserve (commentary. Analysts suggest that President Trump’s policies are likely to drive US inflation and bond yields upward, which may slow the Fed’s rate-cut trajectory, lending further support to the US dollar against the Swiss franc.

JPMorgan economist Michael Feroli stated that while a 25 basis-point rate cut in December is still anticipated, the Fed could shift to a slower pace of easing, cutting once per quarter rather than at every meeting. Traders will closely watch the US Consumer Price Index (CPI) data due Wednesday; expectations are for a 2.6% YoY increase in the headline CPI and a 3.3% YoY rise in core CPI. If the figures come in higher than anticipated, it could dampen hopes for a December rate cut, potentially boosting the USD further.

On the Swiss side, Swiss National Bank (SNB) Vice Chairman Antoine Martin indicated on Monday that the SNB’s decision on December rate cuts will be data-driven, with a potential 25 bps cut widely expected. However, Martin emphasized that the decision will depend on prevailing economic conditions in December, leaving room for flexibility.

Trade Idea:

Consider buying USD/CHF near 0.8770 with a target of 0.8850 and a stop loss at 0.8720. A stronger greenback from higher-than-expected CPI data could drive the pair further up, while SNB’s potential rate cut may weigh on the CHF.