Slight Decline for the New Zealand Dollar Against the Swiss Franc

NZDCHF an Economic Perspective

The New Zealand dollar-Swiss franc pair edged down slightly to 0.4760 on Monday, as the Reserve Bank of New Zealand’s cautious stance toward further monetary tightening weighed on the currency.

The Reserve Bank of New Zealand raised its official interest rate for the second consecutive time last week, but indicated that future increases would be gradual given the mounting risks to the economic outlook.

Governor Anna Breman said the bank needs time to assess the impact of previous interest rate hikes on the real economy, while Deputy Governor Karen Silk indicated that monetary policymakers are inclined to wait until December before raising rates again, prompting investors to reassess future interest rate moves.

Markets currently price in an 80% probability that interest rate hikes will pause in October, while a hike in December remains widely expected.

NZD/CHF from a Technical Perspective

The CHF/NZD pair edged lower on Monday, trading within a downward-sloping price channel on the hourly chart.

We expect the pair to continue its decline in the coming period toward the lower boundary of the channel, then toward 0.4740, and finally toward 0.4700.

The best sell zones for the pair at present are near the 0.4775/80 resistance levels, which are close to the upper boundary of the channel and near the main downtrend line.

This scenario would be invalidated if the pair breaks above the 0.4800 level.