Bias: The outlook for CHF/USD is range-bound, as the current rate is just below the 90-day average and sits within the middle of the 3-month range.
Key drivers:
- Rate gap: The Swiss National Bank has maintained a 0% policy rate, while the Federal Reserve is expected to implement rate cuts, which may weaken the USD against the CHF.
- Risk/commodities: Ongoing geopolitical tensions, alongside concerns around trade tariffs, particularly affecting Swiss exports, are adding pressure on the CHF.
- Trade performance: A significant decline in Switzerland's trade surplus, especially with the U.S., is likely to impact the demand for the franc.
Range: CHF/USD is expected to hold steady within its recent range, fluctuating but not breaking through the extremes.
What could change it:
- Upside risk: A stronger-than-expected performance in the Eurozone could prompt the Swiss National Bank to consider raising rates, supporting CHF.
- Downside risk: Further escalation in geopolitical tensions or adverse tariff developments could increase USD strength, pushing CHF lower.
