Swiss Franc Gains as USD/CHF Retreats Amid Tightening Fed Expectations

The Swiss Franc has gained ground against the US Dollar as the USD/CHF pair struggled to stay above the 0.8100 mark on Monday.

The pair slipped towards the 0.8090 region, giving up its earlier gains and moving into negative territory on the daily chart.

This decline came after Switzerland released unemployment and foreign currency reserve figures for August.

Data from the Swiss State Secretariat for Economic Affairs showed that Switzerland's unemployment rate remained steady at 3.1% in August, marking the fifth consecutive month at this level.

The SNB reported that foreign currency reserves rose modestly to CHF 770 billion in August compared to CHF 768 billion in July.

However, attention is now shifting towards the US, where stronger-than-expected labor market data have increased expectations for tighter Federal Reserve policy.

Friday's employment report showed that the US economy added 162,000 jobs in August, significantly exceeding the 55,000 consensus forecast and Commerzbank's 50,000 estimate.

Previous employment figures were also revised higher by a combined 55,000, providing further evidence of resilience in the US labor market.

CME FedWatch data indicate that markets are pricing a 58% probability of a 25-basis-point Fed rate hike in September, up from 50% before Friday's employment report.