CHF/CNY Outlook: Slightly positive, but likely to move sideways as the rate is above its recent average and nearing recent highs without a clear driver.
Key drivers:
• The Swiss National Bank is maintaining a 0% policy rate, while the People’s Bank of China is actively supporting the yuan through interventions, creating different economic environments for both currencies.
• Oil prices are hovering below average, which typically weakens the yuan, although recent government stimulus has spurred growth, helping to stabilize it.
• Recent trade tensions, particularly the high tariffs on Swiss exports implemented by the U.S., have contributed to pressure on the Swiss franc amidst a backdrop of low inflation.
Range: The CHF/CNY rate is expected to hold within its current range after recently hitting a 60-day high, indicating stability in price.
What could change it:
• An unexpected shift in the Swiss National Bank’s interest rate policy could strengthen the franc.
• Increased economic or trade tensions involving the yuan could lead to a decline in value.
