The recent performance of the Canadian dollar (CAD) against the Swiss franc (CHF) has shown significant upward momentum, largely influenced by recent economic indicators in Canada. On the one hand, a surprising decrease in the unemployment rate from 6.9% to 6.5% combined with stronger-than-expected GDP growth at an annualized rate of 2.6% in Q3 has instilled confidence in the CAD market. As a commodity-linked currency, the CAD also benefited from rising oil prices, which increased by 1.5% to approximately $59.84 per barrel, further supporting Canada's energy-driven economy.
However, the CAD's recent gains could be tempered by declining manufacturing sector indicators, as the S&P Global Canada Manufacturing PMI fell to 48.4 in November, indicating ongoing contraction. The Bank of Canada's recent decision to lower interest rates may also reflect a more cautious monetary policy stance amid these mixed economic signals. Current CAD to CHF levels are at a 90-day high near 0.5818, about 1.6% above the 3-month average of 0.5725, reflecting a stable trading range.
On the Swiss side, developments such as the reduction of U.S. tariffs on Swiss goods from 39% to 15% are expected to relieve some burdens on the economy. However, the Swiss National Bank (SNB) has opted to maintain a 0% interest rate policy despite inflation hitting 0%, with economists mentioning that current conditions do not warrant a shift to negative rates. UBS has revised its forecasts for the CHF downward, underscoring ongoing global uncertainties.
In terms of recent price performances, oil prices have been quite volatile, trading in a 15% range from $60.96 to $70.13. As prices approach 14-day highs near $63.90, this may continue to drive CAD strength as Canada relies heavily on oil revenue. Analysts emphasize that the future trajectory of the CAD/CHF exchange rate will heavily depend on both commodity price movements and central bank policies in Canada and Switzerland, as well as the broader economic outlook.
