USD/CHF rallies beyond 0.8100 with all eyes on trade talks and US CP

• The US Dollar appreciates, and the CHF extends losses on risk-on markets.
• Investors are wary of betting against the US Dollar ahead of Tuesday's US CPI release.
• Hefty US tariffs on Swiss imports are adding bearish pressure on the Swissie.

The Swiss Franc is struggling on Monday amid a moderate risk appetite, while the US Dollar appreciates across the board amid hopes of a US-China trade deal and investors' reluctance of l¡placing large USD shorts ahead of Tuesday's US CPI release.

In the absence of key fundamental releases on Monday, investors remain hopeful that the US and China will find common ground to extend their trade truce and avoid triple-digit tariffs that would bring global trade uncertainties back to the table.

The US wants China to buy more agricultural and technological products from the US to reduce its trade surplus with the US, while the Chinese have expressed security concerns about the H20 Nvidia chip. The deadline to reach an agreement is next Tuesday.

On the macroeconomic front, the focus is on the US consumer inflation figures, also due on Tuesday. The headline CPI is expected to have accelerated to a 2.9% year-on-year pace in July, from 2.8% in June. Likewise, the core inflation is seen rising to 3% from 2.9% in the previous month. Tomorrow's CPI data will be read from a monetary policy approach and might have a significant impact on the USD.

The Swiss Franc, on the other hand, remains on the defensive after US President Trump decided to impose one of the highest tariffs on Swiss exports, at 39%, posing a serious threat to the Swiss export-driven economy and undermining support for the CHF.