AUD/CHF Outlook: Slightly positive, but likely to move sideways, as the rate is above its recent average but lacks a clear driver.
Key drivers:
• Rate gap: The Reserve Bank of Australia is positioning for a possible rate hike to combat rising inflation, while the Swiss National Bank is managing potential deflation risks due to the strong Swiss Franc.
• Risk/commodities: A recent drop in commodity prices has put pressure on the Australian Dollar, traditionally sensitive to fluctuations in key exports like iron ore and coal.
• One macro factor: Australia’s Consumer Price Index data showed a significant jump recently, which may support the AUD in the medium term if inflation fears drive interest rate expectations higher.
Range: The AUD/CHF is likely to hold or drift within its recent stable range as inflation dynamics and commodity movements influence shifts.
What could change it:
• Upside risk: Strong economic data from China, Australia's largest trading partner, could boost demand for AUD.
• Downside risk: Continued weakness in commodity prices or disappointing economic data from Australia could push the AUD lower.
