NZD/CHF Outlook:
The NZD/CHF rate is slightly positive, likely to move sideways as it remains just above the recent average but lacks strong drivers to push higher. The currency is trading above its three-month average, but recent trade figures from New Zealand indicate underlying concerns.
Key drivers:
• Rate gap: The Reserve Bank of New Zealand maintains a hawkish stance, keeping rates steady to counter inflation, while the Swiss National Bank may consider easing due to the strong CHF.
• Risk/commodities: The recent upward trend in global dairy prices supports the NZD, while geopolitical tensions are boosting demand for the safe-haven CHF.
• One macro factor: Unemployment in New Zealand has slightly risen, reflecting a softening labor market, which could impact the NZD.
Range:
The NZD/CHF is likely to drift within its current stable range, as market conditions appear balanced.
What could change it:
• Upside risk: Stronger-than-expected trade figures from New Zealand could bolster the NZD.
• Downside risk: A significant deterioration in global risk appetite due to geopolitical events might enhance the CHF’s safe-haven demand.
