- The SNB’s hawkish stance sets the Swiss franc apart from the Fed and BoE, impacting USDCHF and GBPCHF.
- The Middle East conflict’s risk aversion is driving the Swiss franc to a 2015 high against the Euro.
Investor flight to safety might provide a favorable outlook for the Swiss franc this week.
Swiss franc against the USD and GBP might be the most interesting considering the Fed and the Bank of England (BoE) hold their policy meetings this week, where they are both expected to keep rates exactly where they are. These pauses by the Fed and BoE might contrast too sharply with the Swiss National Bank (SNB), whose Vice-Chairman made some hawkish comments over the weekend, pushing back against expectations that the SNB is done with its rate hikes, and cause some rumblings in the USDCHF and GBPCHF.
Investor risk-aversion has already caused the Swiss franc to hit a high not seen since 2015 against the Euro. Euro Area inflation is also due this week, so this pair might also be appropriate to watch this week.
Regarding the Middle East conflict, latest developments have seen Israeli Prime Minister Benjamin Netanyahu deny they would agree to ceasefire, drawing parallels to US retaliation to the terrorist attacks of 9/11. In this way, we might expect drawn out conflict, and the desirability of the Swiss franc rising.
