USD/CHF climbs amid US Dollar strength, SNB rate hold anticipation

• USD/CHF pair trades close to 0.7950, supported by the stronger US Dollar.
• Markets sharply reduce the probability of a December rate cut.
• The CHF gains support from expectations that the SNB will keep rates unchanged in December.

USD/CHF remains supported on Monday, trading around 0.7950 at the time of writing, up 0.17% on the day. The pair is lifted by renewed strength in the US Dollar (USD) as expectations for an imminent policy easing by the Federal Reserve (Fed) continue to fade. Investors are now awaiting the release of a series of US economic reports delayed by the reopening of the federal government, a key element for clarifying the Fed's policy outlook.

The Nonfarm Payrolls (NFP) report for September is scheduled for release on November 20, but uncertainty persists regarding the publication of other indicators, as several agencies were unable to collect data during the shutdown. Last week, the Director of the US National Economic Council, Kevin Hassett, warned that some October figures may "never be produced."

According to the CME FedWatch tool, markets now assign only a 46% chance to a 25-basis-point rate cut in December, compared with 67% one week earlier. Several Federal Reserve officials have recently emphasized that inflation remains the dominant risk. Kansas City Fed President Jeffery Schmid said current policy is "modestly restrictive" and appropriate, while St. Louis Fed President Alberto Musalem noted that rates are now closer to neutral but called for caution to avoid easing too early.

On the Swiss side, the upside in USD/CHF could be limited by increased support for the Swiss Franc (CHF). Investors now expect the Swiss National Bank (SNB) to keep its policy rate at 0% in December, amid forecasts of slightly rising inflation. The SNB's Vice President, Antoine Martin, recently said inflation is "expected to increase slightly," reinforcing expectations of a rate hold.

The Franc also benefits from confirmation by the Swiss government of a new tariff agreement with the Trump administration. The United States agreed to reduce duties on Swiss exports to 15%, down from 39%, a development that offers meaningful relief to the Swiss economy.