CHF/CNY Outlook:
Slightly positive, but likely to move sideways, as the rate is above its recent average but lacks a clear driver.
Key drivers:
• Rate gap: The Swiss National Bank's cautious approach may support the CHF compared to the People's Bank of China's recent interest rate reductions.
• Risk/commodities: Despite global uncertainties driving the CHF as a safe haven, the Chinese yuan has been managed to prevent rapid appreciation, providing balance in the pair.
• One macro factor: China’s significant government stimulus has led to improving economic figures, which could support the yuan against external pressures.
Range:
The CHF/CNY is likely to hold within its recent 3-month range.
What could change it:
• Upside risk: A shift in the Swiss National Bank towards negative interest rates could weaken the CHF.
• Downside risk: If geopolitical tensions ease significantly, the demand for safe-haven currencies like the CHF may diminish.
