USD/CHF Outlook:
The USD/CHF is likely to decrease as it trades 1.8% below its recent average and is currently near recent lows. Ongoing tariff uncertainties loom heavily over the dollar, while demand for the Swiss franc remains strong amid global economic tensions.
Key drivers:
• Rate gap: The Federal Reserve's recent interest rate hikes have not fully supported the USD against a consistently strong CHF, with the Swiss National Bank maintaining low rates.
• Risk/commodities: With ongoing global economic uncertainties, demand for the safe-haven CHF continues to rise, enhancing its value against the USD.
• One macro factor: The imposition of high tariffs on Swiss exports by the U.S. has put further pressure on the dollar, weakening its position.
Range:
Expect the USD/CHF to drift within its recent range, facing challenges to regain strength.
What could change it:
• Upside risk: A potential resolution of tariff disputes could boost USD strength.
• Downside risk: Further escalation of trade tensions might increase demand for the CHF, further weakening the USD.