• The US Dollar advances on safe-haven demand amid heightened geopolitical tensions.
• Swiss Real Retail Sales rise but fall short of market expectations.
• Investors focus on upcoming US data to confirm the US Dollar’s momentum.

USD/CHF trades around 0.7960 on Monday at the time of writing, up 0.50% on the day, and remains supported after the release of mixed data from Switzerland. Swiss Real Retail Sales rose by 2.3% YoY in November, below market expectations of a 2.9% increase but slightly above the previous 2.2% gain. The data point to resilient consumer spending, although not strong enough to trigger a decisive move in favor of the Swiss Franc (CHF).

The Swiss Franc could nevertheless benefit from renewed safe-haven interest as geopolitical risks intensify. Tensions between Russia and Ukraine have escalated following reports of frequent drone attacks targeting Moscow since the start of the year. This escalation is fostering a more cautious market tone, which may support defensive currencies such as the CHF.

On the US side, the US Dollar (USD) is also benefiting from safe-haven flows, this time linked to political developments in Latin America. The United States (US) has captured Venezuelan President Nicolas Maduro, an event that has revived geopolitical concerns and supported the Greenback. US President Donald Trump has also warned that Washington could step up its actions if Venezuelan authorities fail to cooperate with US plans regarding the Oil sector and efforts to curb drug trafficking.

From a macroeconomic perspective, the US Dollar is further underpinned by recent comments from Federal Reserve (Fed) officials. Minneapolis Fed President Neel Kashkari stated that inflation remains too high and that monetary policy is now close to a neutral level. He also highlighted a gradual cooling in the labor market and a slow downward trend in inflation, reinforcing the view that any easing cycle is likely to be very gradual.

Investors are now awaiting the release of the US ISM Manufacturing Purchasing Managers Index (PMI), due later in the day, to confirm the relative strength of the US economy.