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- USD/CHF: SNB in focus tomorrow – OCBC
USD/CHF: SNB in focus tomorrow – OCBC
USD/CHF fell amid broad USD softness. Pair was last at 0.8479 levels, OCBC’s FX strategists Frances Cheung and Christopher Wong note.
Risks are skewed to the downside
“Bullish momentum on daily chart intact but shows signs of fading while RSI fell. Risks are somewhat skewed to the downside. Support at 0.8375 (2024 low). Resistance at 0.8520 levels. SNB policy decision in focus tomorrow. It is likely policymakers will lower policy rate (by 25bp) to 1%, for the 3rd consecutive time this year.”
“There were some chatters if SNB may follow Fed in delivering a 50bp cut this Thu, but we doubt SNB needs to. Swiss inflation is well under control at 1.1%, in line with SNB’s expectations and a benign inflation profile allows for SNB to ease policy. In addition, industry lobby groups including watchmakers, technology manufacturers’ association have urged SNB and the government to support exporters by curbing the strength of CHF.”
“We are still of the view that recent CHF strength should slow but if broad bearish USD trend remain dominant, then USD/CHF may still be skewed to the downside. From a TWI perspective, we should expect CHF strength to slow.”
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