CHF/AUD Outlook:
The CHF/AUD exchange rate is likely to decrease, as it is currently trading below its recent average and near recent lows, influenced by weakening demand for the Swiss franc.
Key drivers:
• Rate gap: The Swiss National Bank may consider easing measures to combat the strong CHF, while the Reserve Bank of Australia is leaning towards tighter policy due to solid domestic data.
• Risk/commodities: Recent softness in market risk appetite has weighed on the AUD. However, strong commodity demand from China could support the AUD in the long run.
• Macro factor: Persistent geopolitical tensions are enhancing the demand for safe-haven assets like the CHF, leading to its appreciation against other currencies.
Range:
Expect the CHF/AUD rate to remain within its recent stable range, with no significant moves likely as both currencies react to varying macroeconomic factors.
What could change it:
• Upside risk: A sharp increase in Australian commodity prices could revive AUD strength.
• Downside risk: Further easing measures from the Swiss National Bank could increase CHF selling pressure.