CHF/CAD Outlook:
Slightly positive, but likely to move sideways as the rate is above its recent average and near its 3-month highs, but lacks a clear driver for further increase.
Key drivers:
• Rate gap: The Swiss National Bank is contemplating negative interest rates to manage a strong Swiss franc, while the Bank of Canada maintains a cautious approach with stable rates.
• Risk/commodities: Despite recent oil price volatility, with current levels above average, the Canadian dollar's reaction remains uncertain, given escalating U.S.-Canada trade tensions.
• One macro factor: Recent tariffs imposed on Canadian goods by the U.S. are likely to complicate the outlook for the CAD, impacting trade relations and potentially its value.
Range:
The CHF/CAD rate is likely to drift within its 3-month range as it stabilizes after recent highs.
What could change it:
• Upside risk: A significant rise in global oil prices could boost the CAD, strengthening its position against the CHF.
• Downside risk: Further deterioration in U.S.-Canada trade relations could lead to additional pressures on the CAD.
