• USD/CHF witnesses a sharp sell-off near 0.8440 as traders raise bets toward the Fed's sizable rate cuts.
• The US Retail Sales are expected to have risen by 0.2%, slower than 1% in July.
• USD/CHF sees more downside toward 0.8300.

The USD/CHF pair falls sharply to near 0.8440 in Monday’s European session. The Swiss Franc asset tumbles as market speculation for the Federal Reserve (Fed) reducing interest rates by 50 basis points (bps) to 4.75%-5.50% in its monetary policy meeting on Wednesday has strengthened.

The CME FedWatch tool shows that the probability of the Fed reducing interest rates by 50 bps has increased to 59% from 30% a week ago. A swift increase in Fed dovish bets has weighed heavily on the US Dollar (USD). The US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, slumps to near 100.70.

Before the Fed policy meeting, investors will focus on the United States (US) Retail Sales data for August, which will be published on Tuesday. Economists estimate the Retail Sales data to have grown at a slower pace of 0.2% from July’s print of 1%.

Meanwhile, the Swiss Franc will be influenced by market speculation for the Swiss National Bank (SNB)’s interest rate path. The SNB is expected to cut interest rates again in its late September monetary policy as inflationary pressures continue to decline.