USD/CHF Outlook:
Bearish, situated below its 90-day average and near recent lows amid geopolitical tensions.
Key drivers:
• Rate gap: The Federal Reserve has kept interest rates steady while the Swiss National Bank is considering negative rates if the Swiss franc remains strong.
• Risk/commodities: The ongoing geopolitical tensions have heightened demand for the CHF as a safe-haven currency, particularly affecting its valuation against the USD.
• One macro factor: The "Sell America" trend has resurfaced, as investors are reducing their exposure to U.S. assets due to concerns over U.S. trade policies.
Range:
The USD/CHF rate is likely to drift within its recent range, reflecting uncertainty and a lack of strong upward momentum.
What could change it:
• Upside risk: A favorable U.S. jobs report could boost the USD's appeal.
• Downside risk: Continued geopolitical conflicts may further strengthen the CHF as investors seek safety.
