CHF/USD Outlook:
The CHF/USD is currently above its 90-day average and near recent highs, supported by elevated safe-haven demand as global uncertainties persist. However, recent geopolitical tensions may add volatility to the currency pair.
Key drivers:
• Rate gap: The Swiss National Bank's (SNB) potential monetary easing to counteract the CHF's strength contrasts with the Federal Reserve's focus on maintaining higher interest rates.
• Risk/commodities: The USD's rise is fueled by safe-haven demand as reports of potential military action in Iran increase.
• One macro factor: Economic challenges from a government shutdown in the US could slow growth, potentially impacting USD strength.
Range:
The CHF/USD is expected to drift within its recent range, with potential to test the extremes based on geopolitical developments.
What could change it:
• Upside risk: A strong US GDP report could boost the USD significantly.
• Downside risk: Any intervention by the SNB to weaken the CHF might lower its value against the USD.