USD/CHF retreats below 0.8850 as Trump's tariffs loom

• USD/CHF weakens to around 0.8840 in Tuesday's early European session. 
• The swirl of uncertainty surrounding the forthcoming US tariffs weighs on the US Dollar. 
• The Swiss Real Retail Sales rose 1.6% YoY in February, stronger than expected.

The USD/CHF pair softens to near 0.8840 during the early European session on Tuesday. The US Dollar (USD) edges lower against the Swiss Franc (CHF) as traders grow risk-averse ahead of US trade tariffs expected to be unveiled on Wednesday.  

Several Trump administration officials suggested that reciprocal tariffs would be focused on a handful of countries that have large trade imbalances with the US. However, US President Donald Trump said that his "reciprocal tariffs" plan will target all other countries when they are unveiled on Wednesday. The lack of advance clarity on trade policy, along with the potential economic impact of another round of sweeping tariffs, could undermine the Greenback in the near term.

Data released by the Swiss Federal Statistical Office on Tuesday showed that the country's Real Retail Sales rose 1.6% YoY in February, compared to a rise of 2.9% in January (revised from 1.3%). This reading came in stronger than the expectation of 1.5%. The Swiss Franc remains firm in immediate reaction to the upbeat Swiss economic data. 

Meanwhile, global uncertainties and persistent geopolitical tensions could boost the safe-haven flows, benefiting the CHF. Trump also threatened Iran over the weekend with bombing and secondary tariffs if Tehran did not come to an agreement with Washington over its nuclear program. Iran officials warn against any military adventurism and will respond swiftly and decisively to any act of aggression or attack by the US or its proxy, against its sovereignty, territorial integrity, or national interests.