CHF/USD Outlook:
Slightly positive, but likely to move sideways as the rate is above its recent average, yet lacks a clear driver.
Key drivers:
• Rate gap: The Swiss National Bank may consider reintroducing negative interest rates if the Swiss franc stays strong, while the Federal Reserve has maintained a cautious approach by holding rates steady.
• Safe-haven demand: Ongoing global uncertainties are driving investors to favor the Swiss franc, enhancing its value amid economic instability.
• Trade balance impact: A strong Swiss franc challenges exporters, potentially impacting Switzerland's overall economic health and trade balance.
Range:
Expect the CHF/USD to likely drift within its recent range, reflecting stability despite current pressures.
What could change it:
• Upside risk: A shift in U.S. geopolitical policies could improve the dollar's appeal, leading to a stronger USD.
• Downside risk: Continued strength in the Swiss franc relative to negative interest rate expectations could further pressure the CHF against the USD.
