CHF/INR Outlook:
Slightly positive, but likely to move sideways as the rate is above its recent average but lacks a clear supporting driver.
Key drivers:
- Rate gap: The Swiss National Bank's cautious approach to interest rates contrasts with India's ongoing rate challenges due to economic pressures.
- Risk/commodities: Volatility in crude oil prices, which influence the Indian economy, keeps pressure on the INR, as imports remain costly.
- Macro factor: India's persistent current account deficit, linked to a widening trade gap, continues to weigh on the INR.
Range:
Expect CHF/INR to hold steady around current levels, as it has traded in a wide range recently.
What could change it:
- Upside risk: A shift in market perception about Swiss economic stability could strengthen the CHF further.
- Downside risk: A significant increase in Indian exports or a reduction in the current account deficit may enhance the INR's position.
