SGD/CHF Outlook: Slightly weaker, but likely to move sideways, as the rate is below its recent average and near recent lows without a clear driver.
Key drivers:
• Rate gap: The Monetary Authority of Singapore has shifted towards a more accommodative policy, contrasting the Swiss National Bank's stable 0% policy rate amid low inflation.
• Risk/commodities: The recent decline in oil prices has created uncertainty that impacts investor confidence in the Singapore Dollar.
• One macro factor: Ongoing U.S. tariff threats are putting pressure on the Swiss economy and its currency, leading to cautious trading in CHF.
Range: The SGD/CHF is expected to hold within its recent trading range, showing limited directional movement as it drifts near the lower end.
What could change it:
• Upside risk: An unexpected positive shift in Singapore’s economic outlook could bolster the SGD.
• Downside risk: Continued strength in the Swiss franc driven by global market conditions may lead to further depreciation of the SGD.
