Bias: Bearish-to-range-bound, as the CHF is below the 90-day average and in the lower half of the 3-month range.
Key drivers:
• Rate gap: The Swiss National Bank maintains its 0% policy rate, while the Reserve Bank of Australia is signaling potential rate hikes, creating a favorable interest differential for the AUD.
• Risk/commodities: Weaker-than-expected Chinese inflation dampens demand for Australian exports, impacting the AUD negatively, particularly in commodities like iron ore.
• One macro factor: The recent tariff imposed by the U.S. on Swiss exports poses a significant threat to the Swiss economy, potentially weakening the CHF.
Range: The CHF/AUD is likely to drift within its recent range as both currencies face headwinds, though volatility may persist.
What could change it:
• Upside risk: A strong rebound in Chinese economic data could boost demand for Australian exports, strengthening the AUD.
• Downside risk: Continued appreciation of the CHF could prompt the Swiss National Bank to consider negative rates, further pressuring the AUD/CHF exchange rate.
