CHF/AED Outlook:
Slightly positive, but likely to move sideways, with the CHF trading above its recent average but lacking a clear driver.
Key drivers:
• Rate gap: The Swiss National Bank is considering reintroducing negative interest rates to reduce the CHF's strength, while the UAE Central Bank maintains its fixed peg to the US Dollar.
• Risk/commodities: Global oil prices remain volatile, impacting the UAE's foreign reserves and indirectly affecting demand for the AED.
• One macro factor: Continued geopolitical uncertainties are boosting the CHF's status as a safe haven, maintaining upward pressure against the AED.
Range:
The CHF/AED rate is likely to hold within its recent range, with potential for slight fluctuations but no extreme movements expected.
What could change it:
• Upside risk: A significant shift in global economic stability could prompt increased CHF demand as a safe haven.
• Downside risk: A resolution of geopolitical tensions may reduce safe-haven flows, weakening the CHF against the AED.