CAD/CHF Outlook:
The outlook for CAD/CHF is likely to decrease as the rate is trading below its recent average and is near recent lows. The depreciation of the Canadian dollar is mainly linked to weak oil prices impacting its value.
Key drivers:
- Rate gap: The Bank of Canada's recent interest rate cut paired with the stable Swiss National Bank rate diminishes CAD's appeal compared to CHF.
- Risk/commodities: With oil prices above their average, volatility remains high, yet CAD is struggling due to inconsistent oil price support.
- Global economic uncertainties: Ongoing geopolitical tensions boost demand for the safe-haven Swiss franc, further pressuring CAD.
Range:
Expect CAD/CHF to drift within its recent trading range without testing the extremes.
What could change it:
- Upside risk: A significant rebound in oil prices could enhance CAD’s strength.
- Downside risk: Continued concerns about trade tensions or further interest rate cuts from the Bank of Canada may weaken CAD further.