USD/CHF gathers strength above 0.8750 amid the rally in US Dollar

• USD/CHF climbs to near 0.8770 in Monday’s early European session. 
• The victory of Donald Trump in the US presidential elections provides some support to the USD. 
• SNB’s Martin said the central bank had made "absolutely no commitment" to its future course of action. 

The USD/CHF pair extends its upside to around 0.8770, the highest since August 1 during the early European trading hours on Monday. The upward movement of the pair is bolstered by the strength of the US Dollar (USD) as traders await the US inflation data and Federal Reserve (Fed) speakers this week. 

Analysts expect that Trump's policies would put upward pressure on US inflation and bond yields while slowing the Fed’s path to ease policy. This, in turn, lifts the Greenback against the Swiss Franc (CHF). "Given this, we still expect that the Fed will cut another 25bp at the December meeting, but thereafter will only cut once per quarter, in contrast to our previous forecast for a 25bp cut every meeting," said JPMorgan economist Michael Feroli.

Traders will take more cues from the US Consumer Price Index (CPI), which is due on Wednesday. The headline CPI is expected to show an increase of 2.6% YoY in October, while the core CPI is estimated to show a rise of 3.3% YoY during the same period. In case of the hotter-than-expected outcome, this could further reduce the possibility of a December rate reduction, supporting the USD. 

The Swiss National Bank (SNB) Vice Chairman Antoine Martin said on Monday that the central bank is not locked into more interest rate cuts in December, adding that everything will depend on conditions when we assess the situation in December. The markets anticipate the SNB to cut at least 25 basis points (bps) from the current 1% level at its next meeting on December 12.