USD/CHF Outlook:
Bearish, as the rate is below its recent average and has recently faced significant pressures.
Key drivers:
• Rate gap: The Federal Reserve has maintained interest rates, while the Swiss National Bank may consider negative rates if the frank stays strong.
• Risk/commodities: A strong Swiss Franc reflects ongoing demand for safe-haven assets amid global uncertainties and geopolitical tensions.
• One macro factor: The US retail sales figures showed stagnation, raising concerns about consumer spending and weakening the dollar.
Range:
Given its position below the recent average, expect USD/CHF to test the lower extremes of its recent range.
What could change it:
• Upside risk: A strong job report could bolster USD demand, leading to a rebound.
• Downside risk: Continued geopolitical tensions could further depress the USD, sustaining pressure on the exchange rate.