The USD/CHF exchange rate shows a range-bound bias, as it is currently near the 90-day average and within the middle of its recent 3-month range.
Key drivers:
- Rate gap: The Federal Reserve is expected to reduce interest rates, while the Swiss National Bank maintains a 0% policy rate, affecting their respective currencies.
- Risk/commodities: Recent volatility in oil prices may influence the USD's strength, particularly if geopolitical tensions lead to increased oil demand.
- One macro factor: Geopolitical events, such as the U.S. airstrikes in Venezuela, could lead to currency fluctuations as investors react to global risks.
Range: The USD/CHF is likely to hold within its recent range, with potential for minor fluctuations.
What could change it:
- Upside risk: A stronger-than-expected U.S. employment report could boost the USD against the CHF.
- Downside risk: If the Swiss franc continues to appreciate, the Swiss National Bank might consider negative rates, which could weaken the USD/CHF.