- USD/CHF slides as geopolitical risks lift demand for the Swiss Franc.
- Trump’s tariff threat fuels trade war fears and weighs on the US Dollar.
- Traders eye US PCE inflation, GDP data, and Swiss Producer and Import Prices.
The Swiss Franc (CHF) attracts fresh buyers against the US Dollar (USD) on Monday as escalating tensions between the United States (US) and the European Union (EU) over control of Greenland support demand for the safe-haven Franc. At the time of writing, USD/CHF trades around 0.7975, down nearly 0.70% on the day.
Over the weekend, US President Donald Trump posted on Truth Social that a 10% tariff would be imposed from February 1 on eight European nations, including Denmark, Germany, France, the UK, Sweden, Norway, the Netherlands and Finland, adding that it would rise to 25% in June unless and until “a deal is reached for the complete and total purchase of Greenland.”
The announcement has reignited fears of a broader trade conflict and drawn sharp criticism from European leaders, who have warned of possible retaliatory measures. Trump has repeatedly argued that Greenland is strategically vital to the US and its national security, claiming that China and Russia want influence over the territory and saying there is “not a thing” Denmark can do about it.
Against this backdrop, investor confidence in the Greenback as a haven has taken a hit, as Trump’s repeated use of tariffs as a policy weapon continues to fuel uncertainty around the US economy.
The US Dollar Index (DXY), which tracks the Greenback’s value against a basket of six major currencies, is trading around 99.11, down over 0.20%.
Looking ahead this week, US markets are closed on Monday for Martin Luther King Jr. Day. The spotlight then shifts to Thursday’s delayed Personal Consumption Expenditures (PCE) inflation reports and the annualized third-quarter Gross Domestic Product (GDP) release. On Friday, attention turns to the preliminary S&P Global PMI surveys and the University of Michigan consumer sentiment data.
In Switzerland, traders await Producer and Import Prices on Tuesday for fresh insight into domestic inflation pressure.
Markets will also look to the World Economic Forum in Davos, where Swiss National Bank (SNB) Chairman Martin Schlegel is due to speak on Tuesday. US President Donald Trump is expected to address the forum, keeping trade and geopolitical risks in focus. Any fresh headlines on tariffs, Greenland, or US-EU relations are likely to support safe-haven flows into the CHF.
