USD/CHF Outlook: Bearish, as the rate is below its recent average and near recent lows, indicating potential downward pressure.
Key drivers:
• Rate gap: The Federal Reserve is expected to cut rates, while the Swiss National Bank maintains a 0% policy rate, widening the appeal of the Swiss Franc.
• Risk/commodities: As oil prices remain volatile, a weaker US dollar could lead to less support for the franc due to its safe-haven status.
• One macro factor: The ongoing geopolitical tensions and tariff disputes have negatively impacted the USD, contributing to its decline against the CHF.
Range: The USD/CHF is likely to drift lower within its recent range, facing challenges to regain stability.
What could change it:
• Upside risk: Strong US labor market data could shift expectations, boosting the USD.
• Downside risk: Continued strength in the CHF prompted by potential negative rates from the SNB could further press the USD lower.