The USD/CHF pair rose near 0.8340 during the early European session on Monday (5/12). The Swiss Franc (CHF) weakened against the Greenback amid easing fears of a trade war between the United States (US) and China, the world's two largest economies.

China and the US have said that they have made progress in trade talks in Switzerland, weighing on safe-haven currencies such as the CHF and providing some fresh air for the pair. US Treasury Secretary Scott Bessent described the discussions as "productive and constructive," while Chinese Vice Premier He Lifeng said trade talks with US officials were an "important first step" in stabilizing bilateral trade relations.

Further, the hawkish stance from the US Federal Reserve (Fed) provided some support to the US Dollar (USD). Fed officials signaled that they are not inclined to cut interest rates anytime soon. Traders expect the US central bank to deliver two more rate cuts by the end of the year.

On the other hand, persistent geopolitical risks could boost safe-haven flows and help limit losses in the CHF. India on Saturday accused Pakistan of violating a ceasefire agreement reached earlier in the day between the two countries' Directors General of Military Operations (DGMOs). Indian Foreign Minister Vikram Misri said Indian troops have been directed to respond firmly to any further ceasefire violations along the Line of Control (LoC) and the international border. (Newsmaker23)

Source: FXstreet