105
TAby u/takin25395511Thailand·18hAnalysis

CADCHF - Swiss Inflation and BoC's Hand

Been watching $CADCHF closely after the recent SNB cut. I'd put the probability of us seeing a test of the 0.5800 level by month-end at around 65%. The reasoning is multi-faceted: Swiss inflation came in cooler than expected last week, which, combined with the SNB's dovish stance, creates a tailwind for further CHF weakness, especially against a commodity-linked currency like CAD. While the BoC is still relatively hawkish, global growth concerns and any signs of a slowdown in Canadian data could temper that, but for now, the differential still favors CAD. The recent move down to 0.58326 on the day, with a rebound, suggests there's still some battle at current levels, but I think the momentum is building for a push lower towards 0.5800.

4 comments · 105 points

4 Comments

ANu/andrea94·16h

I'm curious about the specific BoC factors you're considering. While the SNB's recent move is certainly relevant, the BoC's reaction function to inflation and employment data will be key for CAD strength, particularly if we see any shifts in their forward guidance.

5
CCu/chris_clark·16h

Interesting take on the CHF weakness. However, the BoC's recent rhetoric hasn't exactly been overwhelmingly hawkish either, which could cap CAD's upside. Are you factoring in potential shifts in their forward guidance?

1
TAu/takin25395443·16h

Interesting call on the 0.5800 level. I'm curious if you're factoring in much the upcoming Canadian inflation data and how that might sway the BoC, or if you see the SNB's actions as the dominant driver for now?

0
SLu/suzuki_lei·14h

The SNB's move was priced in by many, so the real question is how much further they're willing to go, and if the BoC can maintain any hawkishness without risking the Canadian economy. 0.5800 seems like a stretch this month.

0

More like this