Latest Developments:
March 25 – The SNB left its Policy Rate unchanged at -0.75%. The central bank maintained its view of CHF as “highly valued” and reiterated that hey are prepared to step up FX intervention if necessary.
March 3 – CPI for February printed at 0.2% M/M (prior 0.1%) and -0.5% Y/Y, unchanged from January.
February 8 – The Unemployment Rate for January increased to 3.5% from a prior of 3.4%.
December 1 – GDP for Q3 printed at 7.2% Q/Q and -1.6% Y/Y. Alongside exceeding all expectations, both prints were also strong improvements from Q2’s -7.3% Q/Q and 7.8% Y/Y.
Future Sentiment Shifts:
The outlook for CHF remains closely tied to the market’s risk tone and outlook surrounding the coronavirus.
Since peaking in late March of 202, CHF has pulled off if it’s best levels as markets calmed and ceased selling off aggressively. However, with many notable countries experiencing second waves of the coronavirus, risks still remain.
Going forward, price action in CHF will remain closely correlated to the market’s risk tone. Expect renewed strength in the currency if second waves continue to grow, but ongoing weakness if countries can contain isolated incidents and economies remain on track to reach some form of normalcy. Of course, in the medium to long term, the latter remains the market’s base case scenario with the rollout of coronavirus vaccines in many countries now taking place.
Primary Drivers:
Swiss National Bank – Swiss monetary policy, or the market’s outlook for monetary policy rarely proves market moving. Instead, the primary influence from Switzerland’s central bank comes from their constant interference with exchange rates as they continue to actively weaken CHF when they consider the currency to be highly valued.
Risk tone – As a safe haven currency, CHF is strongly correlated with the market’s risk tone, strengthening in risk off environments and weakening in risk on environments.
March 25 – The SNB left its Policy Rate unchanged at -0.75%. The central bank maintained its view of CHF as “highly valued” and reiterated that hey are prepared to step up FX intervention if necessary.
March 3 – CPI for February printed at 0.2% M/M (prior 0.1%) and -0.5% Y/Y, unchanged from January.
February 8 – The Unemployment Rate for January increased to 3.5% from a prior of 3.4%.
December 1 – GDP for Q3 printed at 7.2% Q/Q and -1.6% Y/Y. Alongside exceeding all expectations, both prints were also strong improvements from Q2’s -7.3% Q/Q and 7.8% Y/Y.
Future Sentiment Shifts:
The outlook for CHF remains closely tied to the market’s risk tone and outlook surrounding the coronavirus.
Since peaking in late March of 202, CHF has pulled off if it’s best levels as markets calmed and ceased selling off aggressively. However, with many notable countries experiencing second waves of the coronavirus, risks still remain.
Going forward, price action in CHF will remain closely correlated to the market’s risk tone. Expect renewed strength in the currency if second waves continue to grow, but ongoing weakness if countries can contain isolated incidents and economies remain on track to reach some form of normalcy. Of course, in the medium to long term, the latter remains the market’s base case scenario with the rollout of coronavirus vaccines in many countries now taking place.
Primary Drivers:
Swiss National Bank – Swiss monetary policy, or the market’s outlook for monetary policy rarely proves market moving. Instead, the primary influence from Switzerland’s central bank comes from their constant interference with exchange rates as they continue to actively weaken CHF when they consider the currency to be highly valued.
Risk tone – As a safe haven currency, CHF is strongly correlated with the market’s risk tone, strengthening in risk off environments and weakening in risk on environments.