NZD/CHF Outlook: Slightly positive, but likely to move sideways, as the rate is above its recent average but lacks a clear driver.
Key drivers:
• Rate gap: The Reserve Bank of New Zealand appears more hawkish than the Swiss National Bank, which is cautious amid deflation risks.
• Risk/commodities: The New Zealand dollar benefits from improved global risk appetite, driven by positive economic data while the Swiss franc remains a safe-haven amid geopolitical tensions.
• One macro factor: New Zealand's annual consumer inflation exceeded expectations, suggesting potential monetary tightening which could further support the NZD.
Range: The NZD/CHF is likely to hold within its recent trading range as both currencies face distinct pressures.
What could change it:
• Upside risk: Unexpected stronger economic data from New Zealand could boost the NZD further.
• Downside risk: A significant shift toward risk aversion could lead investors back to the CHF, pressuring the NZD/CHF.