The Swiss franc sees little currency-specific event risk in the week ahead, with price action likely to fall in with broad trends in financial markets' sentiment and the US dollar.
The Swiss franc was one of the worst-performing currencies to end the week's trade, as a broad rally in key risky asset classes decreased flight-to-safety demand for the European currency.
Risk sentiment continues to have influence on price action for the USD/CHF as the dollar has been strongly correlated with demand for high yeiding assets.
The Swiss franc traded to fresh yearly highs against the US dollar and near multi-month peaks against the euro on a broad flight to safety across key financial markets.
If carry flows are the primary catalyst behind recent price action, currency traders ought to have their eye on the trajectory of risk sentiment, meaning global stock and commodity prices.
The Swiss franc may see heavy volatility in the week ahead as the Swiss National Bank gets set to update the markets on monetary policy, including their commitment to prevent the appreciation of the currency.
The Swiss franc has seen bullish progression against most of its pairings this week. However, the few crosses that did not follow the beaten path highlight the primary fundamental drivers that surrounding the currency heading into the new week.
The Swiss Franc has been traditionally linked with risk sentiment as it typically is one of the lowest yielding currencies and the country’s neutral political stance makes it an ideal safe haven.
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