USD/CHF holds above 0.8500 ahead of Swiss CPI data

• USD/CHF attracts some buyers around 0.8515 on the firmer USD.
• The upbeat US labor data on Friday weakens the Federal Reserve's (Fed) case for rate cuts.
• Traders await the Swiss Consumer Price Index for December, due on Monday.

The USD/CHF pair gains momentum during the early European trading hours on Monday. The recovery of the US Dollar (USD) and higher US Treasury bond yields lend some support to the pair. USD/CHF currently trades near 0.8515, up 0.13% on the day.

The better-than-expected US labor data on Friday weakens the Federal Reserve's (Fed) case for rate cuts. Traders are pricing in over 60% odds of rate cuts in the March meeting, according to the CME Fedwatch tool. On Friday, US Nonfarm Payrolls (NFP) grew by 216K jobs in December from 173K in November, exceeding the market consensus of 170K. Meanwhile, the Average Hourly Earnings rose 0.4% MoM, better than the estimated 0.3%, while the annual figure arrived at 4.1 YoY in December versus 4.0% prior, beating the expectation of 3.9%.

Investors will take cues from the Swiss Consumer Price Index for December, due later on Monday. The annual CPI is estimated to show an increase of 1.5% YoY from 1.4% in the previous reading, while the monthly CPI is projected to remain steady at -0.2% MoM.

The highlight of this week will be the US inflation data on Thursday. Market players project the headline Consumer Price Index (CPI) to show an increase of 3.2% YoY, while the Core CPI is estimated to ease from 4% to 3.8% YoY.