CHF/ZAR Outlook:
Slightly positive, but likely to move sideways as the rate is just below its recent average but holds near recent highs.
Key drivers:
• Rate gap: The Swiss National Bank may consider negative interest rates to curb the strong CHF, while the South African Reserve Bank maintains high interest rates to control inflation.
• Risk/commodities: The ZAR finds support from strong global demand for commodities, while recent volatility in oil prices may influence rand fluctuations.
• One macro factor: The South African government's efforts to reduce the budget deficit have boosted investor confidence in the ZAR.
Range:
The CHF/ZAR is expected to hold near its current levels, potentially drifting within its recent trading range.
What could change it:
• Upside risk: A broader reliance on the CHF as a safe-haven currency due to increasing global uncertainties could strengthen the CHF.
• Downside risk: Any negative developments in global commodity prices, especially oil, could pressure the ZAR and lead to a decline.
