USD/CHF hovers around 0.8050 as traders adopt caution ahead of Fed Beige Book

• USD/CHF struggles ahead of US JOLTS Job Openings and the Fed Beige Book due on Wednesday.
• The CME FedWatch tool indicates that more than 89% of a 25-basis-point Fed rate cut is expected in September.
• Thursday's Swiss CPI data will likely provide insights into the SNB's policy outlook for September.

USD/CHF struggles after two days of gains, trading around 0.8040 during the European hours on Wednesday. The pair receives downward pressure as the US Dollar (USD) faces challenges amid rising odds of the US Federal Reserve (Fed) delivering interest rate cut in September. The CME FedWatch tool indicates pricing in more than 89% of a 25-basis-point (bps) rate cut by the Fed at the September policy meeting, up from an 86% chance a day ago.

However, the USD/CHF pair gained ground as rising yields make US assets more attractive to global investors, hence capital inflows increase demand for US Dollar (USD). The two-year and 10-year yields on US Treasury bonds standing at 3.66% and 4.29%, respectively, at the time of writing.

The US JOLTS Job Openings and the US Federal Reserve (Fed) Beige Book will be eyed later in the North American session. Attention will shift toward upcoming data later in the week that could shape the US Federal Reserve's (Fed) policy decision in September. Key reports include ADP Employment Change, Average Hourly Earnings, and Nonfarm Payrolls for August.

The USD/CHF pair also draws support as the Swiss Franc (CHF) struggles as the Swiss National Bank (SNB) officials may consider pushing interest rates into negative territory at this month's policy meeting, as July inflation stayed well below the central bank's 2% target. Traders will likely gain fresh impetus from Swiss Consumer Price Index (CPI) data for August due on Thursday, with expectations for a steady 0.2% annual increase and flat growth on a monthly basis.