Bias: The CHF/CNY pair shows a bearish-to-range-bound bias, positioned below the 90-day average and in the lower half of the three-month range.
Key drivers:
• Rate gap: The Swiss National Bank (SNB) maintains a zero policy rate amid low inflation, while the People's Bank of China (PBOC) is focused on stabilizing the yuan, which supports a stronger Chinese currency relative to the Swiss franc.
• Risk/commodities: With oil prices stabilizing, the outlook for the Swiss economy weakened by tariffs is adding negative pressure on the CHF.
• One macro factor: China’s economic growth has outpaced expectations, with significant government stimulus bolstering market confidence and the yuan.
Range: The CHF/CNY pair is expected to drift within its recent range as it tests local support levels without significant volatility.
What could change it:
• Upside risk: A shift in the SNB’s monetary policy could lead to a stronger CHF if inflationary pressures increase.
• Downside risk: Continued trade tensions and poor export performance for Switzerland could weaken the CHF further against the CNY.
