Dollar Surges Against Franc as Rate Hike Bets Skyrocket

The US Dollar (USD) has strengthened against the Swiss Franc (CHF), extending its winning streak to four consecutive days. The USD/CHF pair is trading around 0.8180, with a nearly 87% probability of a quarter-point rate hike at the Federal Reserve's September meeting.

This follows hotter US inflation reports, which show that the Consumer Price Index (CPI) accelerated in August, putting the 12-month increase at 3.4%. The core CPI also increased by 0.3%, beating expectations. These numbers have reinforced expectations of a rate hike next week.

Meanwhile, the Swiss Franc is struggling due to a potentially widening interest rate differential with the US and new wave of yen-carry-trades. This has led to downward pressure on the CHF as investors sell their franc-funded loans to buy higher-yielding assets elsewhere.