CHF/USD Outlook:
Slightly positive, but likely to move sideways as the rate is above its recent average, yet lacks a clear current driver.
Key drivers:
• Rate gap: The Swiss National Bank is considering negative interest rates to curb CHF strength, contrasted with the U.S. Federal Reserve holding rates steady amid a tight labor market.
• Risk/commodities: Global uncertainties and geopolitical tensions are increasing investment in CHF as a safe-haven asset, which supports its value against the USD.
• One macro factor: The U.S. dollar is under pressure as global de-dollarization trends advance, with plans announced to boost trade in local currencies.
Range:
Expect CHF/USD to hold near current levels within its recent 3-month trading range, rather than testing extremes.
What could change it:
• Upside risk: A resurgence in U.S. economic data could boost the USD and shift momentum.
• Downside risk: Further moves towards negative interest rates by the Swiss National Bank could weaken the CHF.