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The USD/CHF pair clings to gains in Friday’s late Asian session near a fresh monthly high around 0.8070 posted on Thursday. The Swiss Franc pair traders firmly as the US Dollar (USD) has stretched its rally despite upbeat expectations that the Federal Reserve (Fed) will cut interest rates further in the remaining year.

At the time of writing, the US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, holds onto gains near the two-month high around 99.50 posted on Thursday.

According to the CME FedWatch tool, traders see an 81.5% chance that the Fed will cut interest rates by 25 basis points (bps) in each of its remaining two monetary policy meetings this year.

Fed dovish bets have remained upbeat as latest commentaries from members of the Federal Open Market Committee (FOMC) have signaled that they have become more concerned about downside labour market risks, while remaining confident that consumer inflation expectations are anchored.

On Thursday, New York Fed Bank President John Williams warned of labour market risks, citing that companies hesitate to hire new workers, which underscores the need for more interest rate cuts this year, The New York Times (NYT) reported.

In Friday’s session, investors will focus on the preliminary Michigan Consumer Sentiment Index and Consumer Inflation Expectations data for October, which will be published at 14:00 GMT.

In the Swiss economy, growing expectations of inflation rising in the coming quarters are diminishing fears that the Swiss National Bank (SNB) could push interest rates into a negative territory. Latest comments from SNB Chairman Martin Schlegel have signaled that consumer inflation could accelerate in the coming quarters.

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