CAD/CHF Outlook:
The CAD/CHF exchange rate is likely to decrease as the rate is currently near 30-day lows and significantly below its recent average. The recent fall in oil prices and potential contraction in Canada’s GDP could weigh on the Canadian dollar.
Key drivers:
• Rate gap: The Bank of Canada has kept interest rates steady while the Swiss National Bank maintains a highly accommodative stance, benefiting the CHF.
• Risk/commodities: Oil prices are currently high but volatile, which could positively impact the CAD if they stabilize, but recent drops are a concern.
• Economic Performance: Canada’s GDP report may show contraction, adding pressure on the CAD amid a robust Swiss economy supported by safe-haven demand.
Range:
Expect the CAD/CHF to hold within the current low range, potentially testing recent lows.
What could change it:
• Upside risk: A significant rise in oil prices could strengthen the CAD.
• Downside risk: A worse-than-expected GDP report from Canada could further weaken the CAD.