CHF/INR Outlook: The outlook is likely to increase as the CHF trades well above its recent average and near recent highs, supported by the strong Franc amid economic pressures on the INR.
Key drivers:
• Rate gap: The Swiss National Bank maintains a 0% policy rate, while the Reserve Bank of India faces challenges with capital outflows and trade deficits.
• Risk/commodities: The ongoing tariffs on Swiss exports, particularly from the U.S., put short-term pressure on the economy, but the overall stability of the Swiss Franc remains strong.
• One macro factor: The decline in Switzerland's trade surplus points to a weakening export position, but ongoing economic conditions may prompt a policy shift from the SNB if the strong Franc persists.
Range: Expect CHF/INR to remain stable within its recent range, as it tests the upper end due to current pressures.
What could change it:
• Upside risk: A resolution in trade negotiations with the U.S. could strengthen the INR.
• Downside risk: Continued strong performance of the CHF without supportive adjustments from the SNB may push rates higher.
