CHF/AUD Outlook:
Slightly weaker, but likely to move sideways, as the CHF is below its recent average and within its 3-month range.
Key drivers:
• Rate gap: The Swiss National Bank is considering negative interest rates if the CHF remains strong, while the Reserve Bank of Australia has recently increased rates to combat inflation.
• Risk/commodities: With Brent Crude OIL/USD expected to remain volatile, any drop in commodity prices could influence the AUD negatively.
• One macro factor: Australia's inflation data exceeded expectations, leading markets to anticipate further tightening from the RBA, which supports the AUD.
Range:
Expect CHF/AUD to hold steady within its recent range, as it is currently below average but lacks strong directional pressures.
What could change it:
• Upside risk: A surprising shift in global demand for Australian commodities could strengthen the AUD significantly.
• Downside risk: If the Swiss National Bank moves to implement negative rates, the CHF could strengthen, pushing the pair lower.
