USD/CHF has risen above 0.7930 as the US Dollar strengthens due to a risk-off sentiment in the market. This rise in USD/CHF comes after the United States recently struck Venezuela and captured President Nicolas Maduro. On Monday, traders will be watching for the Swiss Real Retail Sales and US ISM Manufacturing PMI data. During the early Asian trading session, the USD/CHF pair increased by 0.15%, reaching almost 0.7930. Meanwhile, the US Dollar Index (DXY) rose by 0.25% to about 98.66.

Expect Some Volatility in USD

Volatility is expected for the USD this week due to upcoming US data releases, including the December Nonfarm Payrolls (NFP). This data is particularly important as the recent government shutdown had little impact on it. The ISM Manufacturing PMI for December is expected to be at 48.3, a small rise from November’s 48.2. This suggests that manufacturing activities are still contracting since a number below 50 indicates a decline. Also on Thursday, the Consumer Price Index (CPI) data for December will be released, which could influence Swiss National Bank (SNB) policy. On Monday, attention will also be on November’s Swiss Real Retail Sales data, which is expected to show an annual growth rate of 2.9%, compared to 2.7% in October. Recent US actions in Venezuela have created a risk-off sentiment, leading investors to move funds into the safe-haven US Dollar. The Dollar Index is moving up towards 98.66, directly lifting the USD/CHF pair. This geopolitical uncertainty suggests that traders should expect increased implied volatility across main currency pairs in the coming days.

Key Data and Indicators

Everyone is focused on the US ISM Manufacturing PMI data released today, which will be the first major test for the US economy this week. If the number is significantly lower than the expected 48.3, it could weaken the dollar, confirming the ongoing manufacturing struggles observed throughout 2025. Traders might look to buy short-term put options on the USD as protection against a disappointing result. The most crucial event this week is the December Nonfarm Payrolls (NFP) report. Previously, the Federal Reserve cut interest rates in 2025 mainly due to a cooling job market, with job growth averaging only 155,000 per month in the second half of the year. A strong NFP number, for instance over 200,000, would challenge expectations for more Fed easing and could lead to a notable rally in the dollar. We must also consider the factors influencing the Swiss Franc, especially the upcoming Consumer Price Index (CPI) data. Swiss inflation has been on the rise, with November 2025 showing a year-over-year increase of 1.9%, close to the SNB’s target. If the CPI is higher than expected, speculation may increase that the SNB will adopt a more hawkish stance, supporting the Franc. In summary, with the geopolitical situation and key economic data providing conflicting signals, expect increased volatility. Trading strategies that benefit from significant price movements, such as buying strangles or straddles on USD/CHF before the NFP release, could be beneficial. The Cboe Volatility Index (VIX), known as the market’s “fear gauge,” has already jumped over 8% to 14.8 in early trading, indicating rising uncertainty. Create your live VT Markets account and start trading now.

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