USD/CHF Outlook:
Slightly weaker, but likely to move sideways, as the rate is below its recent average and there isn’t a clear direction.
Key drivers:
• Federal Reserve Policy: The Federal Reserve has held interest rates steady, reflecting a cautious outlook on the economy, which may limit USD strength.
• Safe-Haven Demand: Ongoing geopolitical tensions are driving investors towards the Swiss Franc, enhancing its safe-haven status.
• Global De-Dollarization: Recent trends reveal a reduction in dollar reserves held globally, which may weigh on the USD moving forward.
Range:
The USD/CHF is likely to drift within its recent range, influenced by mixed signals affecting both currencies.
What could change it:
• Upside risk: A surprise economic release showing stronger-than-expected US growth could lead to a USD rebound.
• Downside risk: An escalation in geopolitical tensions could increase demand for the CHF as a safe haven, putting further pressure on the USD.