USD/CHF may correct higher in the near term – OCBC

The Swiss Franc (CHF) has been one of the outperformers in 2023, gaining by nearly 10% vs. the US Dollar (USD). Economists at OCBC Bank analyze USD/CHF outlook.

Forecast trajectory is largely flat for USD/CHF

In the near term, USD/CHF may correct higher as the Fed has yet to embark on rate cut but markets may be pricing a dovish shift in CHF policy. 

Our forecast trajectory is largely flat for USD/CHF, taking into account 1/ a moderate and soft USD view (premised on our view that the Fed will cut rates, possibly as early as 2Q 2024) and 2/ that Swiss policymakers may no longer pursue a strong CHF policy as well as the risks for SNB rate cuts in 2H 2024. These effects should in some way offset each other.

USD/CHF – Mar-24 0.8800 Jun-24 0.8800 Sep-24 0.8900 Dec-24 0.9000 Mar-25 0.9000