CAD/CHF Outlook: The outlook for CAD/CHF is likely to decrease as the rate is below its recent average and near recent lows, influenced by specific economic pressures.
Key drivers:
• Rate gap: The Bank of Canada cut rates recently, while the Swiss National Bank maintains a zero percent policy, widening the interest rate differential against the Canadian dollar.
• Risk/commodities: A recent rise in oil prices to 90-day highs may provide some support to the CAD, but ongoing price volatility creates uncertainty for this commodity-linked currency.
• Trade policy uncertainty: New tariffs impacting Canadian exports to the U.S. have weakened the CAD, compounding challenges for the currency.
Range: CAD/CHF is likely to hold within its recent lower range, showing limited upward movement in the short term.
What could change it:
• Upside risk: A significant rebound in oil prices could bolster Canadian exports and strengthen the CAD.
• Downside risk: Continued weakness in Canadian economic indicators or further trade policy issues could pressure the CAD lower against the CHF.
