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USD/CHF extends gains as Fed hike bets lift the dollar

The CME FedWatch Tool shows a greater than 70% probability of an October Fed rate hike, up from 57.6% last week.

Reported · Written up by our desk · Major Pairs

USD/CHF extended gains for a fourth consecutive trading day and hovered near a fresh 16-month high of 0.8314 during European hours on Monday, as the US dollar strengthened.

FXStreet attributes the move to hawkish comments from Federal Reserve officials, with investors also looking ahead to key US employment reports and the Fed’s preferred inflation measures.

Cleveland Fed President Beth Hammack warned against allowing prices to normalize at elevated levels, while Philadelphia Fed President Anna Paulson said further rate increases might be warranted.

Reflecting shifting expectations, the CME FedWatch Tool indicated more than a 70% probability of an October rate hike, up from 57.6% last week and 17.7% a month ago.

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