Swiss Franc ticks up against US Dollar following Swiss employment data

• USD/CHF retreats below 0.8100, giving away previous gains.
• Swiss Unemployment Rate remained steady at 3.1% in August.
• Fed-SNB monetary policy divergence is keeping CHF bulls subdued.

The Swiss Franc (CHF) bounced up against the US Dollar (USD) on Monday. The USD/CHF pair failed to confirm above 0.8100 on Monday and retreated to the 0.8090 area, giving away previous gains and turning negative on the daily chart following the release of Swiss Unemployment and Foreign Currency Reserves data for August.

Data released by the Swiss State Secretariat for Economic Affairs earlier on Monday revealed that the Unemployment Rate remained unchanged at 3.1% in August for the fifth consecutive month. Also on Monday, the SNB reported that Foreign Currency Reserves increased to CHF 770 billion in August from CHF 768 billion in July.

US data boost hopes of a Fed rate hike

On Friday, the US labor market report delivered a notable upside surprise. Economists at Commerzbank affirm that August employment showed a "surprisingly strong 162,000 (consensus estimate: 55,000; Commerzbank forecast: 50,000)." They also observe that "the figures for previous months were revised upward by a total of 55,000. For example, the number of jobs in July did not fall by 23,000 as initially reported, but rose by 21,000," which brightened the outlook of the labour market further.

"From the Federal Reserve’s perspective, however, consumer prices are likely to be more important in determining whether interest rates will be raised on September 16." The bank notes that "August’s inflation figures will be released next Friday," and sees these data as the key input for the Fed’s upcoming decision.

FX volatility remains subdued on Monday with US markets closed for the Labor Day bank holiday, with monetary divergence likely to keep USD dips limited. Data from the CME's FedWatch Tool shows that the odds for a quarter-point Fed hike in September have risen to 58% from 50% before last Friday's NFP release, while the SNB is expected to leave its benchmark interest rate at 0% during the rest of 2026 and the first half of 2027 at least.