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• USD/CHF weakens to near 0.8790 in Monday’s early European session, losing 0.18% on the day. 
• Geopolitical tensions and trade war concerns underpin the Swiss Franc, a safe-haven currency. 
• Fed’s Daly still sees two interest-rate cuts this year as a "reasonable" projection. 

The USD/CHF pair extends the decline to around 0.8790 during the early European session on Monday, pressured by the weaker US Dollar (USD). Traders await on the sidelines ahead of a planned announcement on Wednesday by US President Donald Trump on reciprocal tariffs. 

US President Donald Trump said on Sunday that reciprocal tariffs he is set to announce on Wednesday will include all countries, not just a smaller group of 10 to 15 countries with the biggest trade imbalances. The concerns over an escalating global trade war, along with fears of a recession in the US, exert some selling pressure on the Greenback against the Swiss Franc (CHF). 

San Francisco Federal Reserve Bank President Mary Daly noted on Friday that she expects two rate cuts this year, but with robust economic indicators, Fed officials can hold off on cutting rates until they evaluate how businesses adapt to tariff costs. According to the CME FedWatch tool, swaps traders continued to price in about two quarter-point rate cuts this year, with the first seen coming in July. 

Meanwhile, Israel has resumed airstrikes in Gaza and deployed troops in Syria, while the US stepped up its attack on Houthi rebels in Yemen. Additionally, Trump said on Sunday that he was "pissed off" at Russian President Vladimir Putin and would impose secondary tariffs of 25% to 50% on buyers of Russian oil if he feels Moscow is blocking his efforts to end the war in Ukraine. Traders will closely monitor the developments surrounding geopolitical risks. Any signs of escalation could boost the safe-haven demand, supporting the CHF. 

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