CHF/CNY Outlook:
Slightly positive, but likely to move sideways, as the rate is above its recent average without a clear driver to push it higher.
Key drivers:
- Rate gap: The Swiss National Bank is expected to keep interest rates steady, while the People's Bank of China has recently lowered rates, widening the gap in favour of the Swiss Franc.
- Risk/commodities: Ongoing global uncertainties continue to boost the Swiss Franc due to its safe-haven status, while the Chinese Yuan faces pressure from government measures aimed at stabilizing trade.
- One macro factor: China’s economy has shown stronger growth than expected, supported by significant government stimulus despite ongoing weaknesses in sectors like real estate.
Range:
The CHF/CNY exchange rate is likely to test recent extremes but may remain within a stable range.
What could change it:
- Upside risk: An unexpected shift towards negative interest rates by the Swiss National Bank could strengthen the CHF.
- Downside risk: Any renewed weakness in China's trade balance could put downward pressure on the CNY.
