USD/CHF holds losses near 0.8050 amid rising Fed rate cut bets, US NFP eyed

• USD/CHF struggles as the US Dollar loses ground ahead of US Nonfarm Payrolls.
• CME FedWatch tool suggests a pricing in more than 99% of a 25-basis-point Fed rate cut in September.
• The Swiss Franc receives support from safe-haven inflows, driven by rising debt and persistent inflation concerns.

USD/CHF retraces its recent gains from the previous session, trading around 0.8050 during the Asian hours on Friday. The pair depreciates as the US Dollar (USD) struggles amid rising odds of a Federal Reserve rate cut in September, following softer-than-expected United States (US) job data released on Thursday. The CME FedWatch tool indicates a pricing in more than 99% of a 25-basis-point (bps) rate cut by the Fed at the September policy meeting, up from 87% a week ago.

The US Initial Jobless Claims increased to 237K in the week ending August 30, up from 229K previously and above the market forecast of 230K. Meanwhile, the ADP Employment Report showed a gain of 54,000 jobs in August, below expectations of 65,000 and following a revised 106,000 increase in July (from 104,000).

Traders are awaiting further labor market data that could shape the US Federal Reserve's (Fed) policy decision in September. Economists project US Nonfarm Payrolls to add about 75,000 jobs in August, while the Unemployment Rate is seen at 4.3%.

Additionally, the USD/CHF pair depreciates as the Swiss Franc (CHF) receives support from safe-haven inflows. The yield on the 10-year Swiss government bond fell to 0.30%, down more than 5.5%, amid a sharp global bond sell-off fueled by rising debt concerns, persistent inflation risks, and increasing political pressure on central banks.

The Swiss National Bank (SNB) is widely expected to maintain its interest rate at 0% later this month following the Swiss inflation data, which remained at 0.2% in August, aligning with the central bank's target of 0%-2%.