USD/CHF continues its losing streak that began on July 30, trading around 0.8500 during the European session on Monday. This downside of the USD/CHF pair is attributed to expectations of the Federal Reserve’s (Fed) reducing interest rates in September.

Disappointing US jobs market data and a larger-than-expected contraction in the ISM Manufacturing PMI have raised the probability of a 50-basis point rate cut in September, increasing to 74.5% from 11.5% a week earlier, according to the CME's FedWatch Tool.

US Nonfarm Payrolls (NFP) increased by 114K in July from the previous month of 179K (revised down from 206K). This figure came in weaker than the expectation of 175K, data showed on Friday. Additionally, the US ISM Manufacturing Purchasing Managers Index (PMI) tumbled to an eight-month low of 46.8 in July. Moreover, traders await ISM Services PMI for July on Monday, which is expected to rise to 51.0 from 48.8 prior.

In Switzerland, inflation increased by 1.3% year-over-year, in line with expectations and consistent with previous rises. This stability strengthens the likelihood of a third consecutive rate cut by the Swiss National Bank (SNB) in September. Additionally, the 10-year yield on Swiss bonds has dropped to a near two-year low of 0.37%. The SNB has been ahead of global peers in its monetary easing, having cut borrowing costs in both of this year’s decisions.

Traders are looking forward to Tuesday's release of the July Unemployment Rate and June Real Retail Sales, which may provide further insight into the Swiss economy and influence the SNB’s policy direction.

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