CAD/CHF Is Likely To Rebound As The World Begins A New Economic Cycle, Yet Consolidation Is Likely In The Shorter Term
CAD/CHF is a "long-growth", "short-uncertainty" trade. CAD is correlated with the global energy sector, while CHF correlates with political instability.In a global economic recession, it is not surprising to see CAD falling and CHF strengthening.However, as CAD/CHF now rests at long-term lows, over the medium to long term, it is not unlikely that the current time will prove to be a turning point.CHF remains hotly demanded, likely owing mostly to short-EUR/CHF flows. However, as the world begins to rebound, the premium to own Swiss francs is likely to unwind, while the basis for owning Canadian dollars may improve.CAD/CHF may not be an especially appealing "long" trade at present, but the long-term trajectory from this current juncture is likely to favor upside.
Seekingalpha · 10/04 09:40