CHF/CNY Outlook:
The CHF/CNY exchange rate is slightly weaker but likely to move sideways. Currently trading near its 14-day lows and about the average for the past three months, there are no strong drivers pushing it in either direction.
Key drivers:
• Rate gap: The Swiss National Bank (SNB) may need to intervene due to the CHF's strength, while the People's Bank of China (PBOC) is focused on maintaining stability for the CNY.
• Risk/commodities: Oil prices are a key factor, with fluctuations impacting the CNY directly, especially given China's reliance on commodities for economic performance.
• Macro factor: China's economic recovery is showing positive signs, supported by government stimulus, which could stabilize the CNY despite ongoing global challenges.
Range:
Expect the CHF/CNY to drift within its recent range as neither currency currently has a clear advantage.
What could change it:
• Upside risk: A significant easing of U.S. rates could boost demand for CNY, driving it stronger against the CHF.
• Downside risk: Continued strength of the CHF due to geopolitical uncertainties could limit the CNY’s potential for appreciation.