CHF/TRY Outlook:
The CHF/TRY exchange rate is likely to increase as it is trading above its recent average and nearing recent highs. The Swiss franc is benefiting from its safe-haven status amid global uncertainties.
Key drivers:
- Rate gap: The Swiss National Bank's focus on maintaining a strong currency contrasts with the Turkish Central Bank's recent decision to cut interest rates significantly.
- Risk/commodities: Global economic tensions have led to high demand for safe-haven assets like the CHF, supporting its value.
- One macro factor: Despite the challenges from tariffs, Switzerland's expanding trade surplus is expected to underpin the CHF's strength.
Range:
The CHF/TRY may continue to drift upwards within the recent range, potentially testing its upper extremes as volatility remains a factor.
What could change it:
- Upside risk: Any unexpected intervention by the Swiss National Bank to manage the currency's strength could boost the CHF further.
- Downside risk: A sudden shift in macroeconomic conditions in Turkey could weaken the lira, pushing the rate lower.