USD/CHF has risen above 0.7930, as the US Dollar gains strength following a risk-off sentiment in the market. The increase in USD/CHF coincides with the United States’ recent strike on Venezuela and the capture of President Nicolas Maduro.
On Monday, the Swiss Real Retail Sales and US ISM Manufacturing PMI data are anticipated events. During the early Asian trading session, the USD/CHF pair increased by 0.15% to almost 0.7930. At the same time, the US Dollar Index (DXY) climbed 0.25% to approximately 98.66.
Volatility Expected in USD
Volatility is expected in the USD this week, with upcoming US data releases, including the December Nonfarm Payrolls (NFP) data. This payroll data is especially relevant as the recent government shutdown had little effect on it.
The ISM Manufacturing PMI for December is expected at 48.3, a slight increase from November’s 48.2, suggesting ongoing contraction in manufacturing activities. A figure below 50 indicates a decline in business activities. For the CHF, the Consumer Price Index (CPI) data for December will be released on Thursday, potentially affecting Swiss National Bank policy.
On Monday, the focus will also be on November’s Swiss Real Retail Sales data, expected to show an annual growth rate of 2.9%, compared to 2.7% in October.
The recent US action in Venezuela has created an immediate risk-off sentiment, pushing capital into the safe-haven US Dollar. We are seeing the Dollar Index climb towards 98.66, which is directly lifting the USD/CHF pair. This geopolitical uncertainty means derivative traders should anticipate higher implied volatility across major currency pairs in the coming days.
Key Data and Indicators
All eyes are on the US ISM Manufacturing PMI data being released today, which will be the first major test of the US economy this week. A number that is significantly worse than the expected 48.3 could challenge the dollar’s recent strength, as it would confirm the persistent manufacturing weakness we observed throughout 2025. Traders might consider buying short-term put options on the USD as a hedge against a surprisingly poor reading.
The most critical event this week will be the US Nonfarm Payrolls (NFP) report for December. We recall that the series of rate cuts by the Federal Reserve in 2025 was largely a response to a cooling labor market, where job growth averaged a sluggish 155,000 per month in the second half of the year. A strong NFP number, for instance above 200,000, would challenge the market’s expectation for further Fed easing and could trigger a sharp rally in the dollar.
We must not ignore the Swiss Franc’s own drivers, particularly the upcoming Consumer Price Index (CPI) data. Swiss inflation has been trending higher, with the last reading in November 2025 showing a year-over-year increase of 1.9%, just shy of the Swiss National Bank’s target. A hotter-than-expected CPI print could increase speculation that the SNB will pivot to a more hawkish stance, providing some support for the Franc.
Given the conflict between geopolitical safety flows and pivotal economic data, increased volatility is the main takeaway. Trading strategies that benefit from a large price move, such as buying strangles or straddles on USD/CHF ahead of the NFP release, could be advantageous. The Cboe Volatility Index (VIX), often called the market’s “fear gauge,” has already climbed over 8% to 14.8 in early trading, reflecting this growing uncertainty.
