USD/CHF climbs past 0.7930 as the week begins on a cautious note

USD/CHF Rises Amid Heightened Market Uncertainty

The USD/CHF currency pair climbed by 0.15% to approach 0.7930 during Monday’s Asian session. This upward movement for the Swiss Franc pair comes as the US Dollar (USD) strengthens, fueled by a wave of risk aversion in the markets. The shift in sentiment follows the United States’ recent military action in Venezuela and the apprehension of President Nicolas Maduro, who now faces drug-trafficking charges in New York.

Currently, the US Dollar Index (DXY)—which measures the Greenback’s performance against a basket of six major currencies—has advanced by 0.25%, reaching close to 98.66.

Market participants are preparing for significant swings in the US Dollar this week, as several key economic reports are scheduled for release. Of particular interest is December’s Nonfarm Payrolls (NFP) report, which is expected to provide an undistorted view of the labor market, unaffected by the recent government shutdown.

The outcome of the NFP data will play a crucial role in shaping expectations for the Federal Reserve’s policy decisions at its January meeting, especially since anticipated rate cuts in 2025 are largely tied to labor market softness.

Key Data Releases to Watch

• US ISM Manufacturing PMI: Investors are also eyeing the ISM Manufacturing Purchasing Managers’ Index for December, set to be published at 15:00 GMT on Monday. Forecasts suggest a slight uptick to 48.3 from November’s 48.2, indicating continued contraction in manufacturing activity, though at a slower rate. Any reading below 50.0 signals a decline in business conditions.
• Swiss CPI and Retail Sales: For the Swiss Franc, the main event this week will be the release of December’s Consumer Price Index (CPI) on Thursday. This inflation data will offer insights into whether the Swiss National Bank (SNB) might soon shift toward policy normalization. Additionally, November’s Real Retail Sales figures, due at 07:30 GMT on Monday, are projected to show a year-over-year increase of 2.9%, up from 2.7% in October.