USD/CHF holds ground above major level at 0.9000 ahead of US Retail Sales

• USD/CHF continues to lose ground on the Fed’s interest rate uncertainty.
• Safe-haven Swiss Franc receives flows due to the risk aversion over Middle-East conflict.
• The recovery in US bond yields could limit losses of the US Dollar.

USD/CHF extends the losing streak on the second consecutive session, trading lower around 0.9020 during the Asian session on Monday. The uncertainty regarding the Federal Reserve's (Fed) future decisions on interest rates is contributing to a complex and fluctuating environment for the US Dollar (USD).

Furthermore, the Swiss Franc (CHF) seems to be receiving buying support amid the military conflict in the Middle East, as the currency is considered a safe haven during times of geopolitical uncertainty. Investors seeking refuge in a stable and secure currency may be contributing to the strength of the CHF in the current geopolitical landscape.

According to an undisclosed source cited by Reuters, discussions have taken place between US officials and Israel regarding the potential visit of President Joe Biden to Israel. The reported invitation for this visit comes from Israeli Prime Minister Benjamin Netanyahu.

On Friday, the Swiss Producer and Import Prices (YoY) recorded a 1.0% decline in September, an increase from the previous decline of 0.8%. Meanwhile, the monthly data indicated a decrease of 0.1%, contrasting with the 0.8% decline observed in August. Trade Balance for September will be released later in the week.

Multiple Fed officials signaled a potential delay in a rate hike for November due to the surge in bond yields, causing tightened financial conditions, is acting as a headwind for the USD/CHF pair.

The US Dollar (USD) faces challenges following the release of the preliminary US Michigan Consumer Sentiment Index for October on Friday, showing a decline to 63.0 from the previous reading of 68.1, falling short of the expected 67.4.

The US Dollar Index (DXY) trades slightly lower around 106.50. The recovery in US Treasury yields from recent losses may contribute to supporting the Greenback. The 10-year US Treasury bond yield stands at 4.67%, up by 1.37%, by the press time.

The upcoming release of US Retail Sales (MoM) on Tuesday is anticipated to show a 0.2% rise in September compared to the previous reading of 0.6%, and this data could influence market dynamics and the USD/CHF pair