The Canadian dollar rallied against the Swiss franc early on Friday, but is having a bit of trouble holding those gains into the weekend.
CAD/CHF
The Canadian dollar rallied against the Swiss franc early during the trading session on Friday but seems to be running out of steam near the 0.5850 level. Canadian yields did rise a little bit, with the 10-year producing 3.65% and climbing. Ultimately, the situation here is that it is a fairly wide interest rate differential between the Canadian and Swiss National Bank as far as interest rates are concerned. And with that being the case, it does make sense that we continue to see upward pressure.
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The market is at an area that's been important a couple of times previously, so a little bit of a pullback would not be a huge surprise. I'd also point out that the 50-day EMA is starting to cross above the 200-day EMA in the so-called Golden Cross. If we can break above the top of the candlestick for the Friday session, I suspect that this pair could go looking to the 0.59 level over time.
Golden Cross and Cyclical Upside
The Swiss franc right now is in fairly serious trouble, but it's so highly elevated, historically speaking, that it's got a long way to go before the Swiss National Bank would be concerned. In fact, they actually encourage shorting of the Swiss franc so it helps with their exports. Granted, most of that is directed towards the euro against the Swiss franc, but they'll take any help that they can get.
Furthermore, you have to keep in mind that the crude oil market remains volatile, and that could keep the Canadian dollar bid in general. I like this pair. I think we've got a long way to go. We've been in a downtrend since the middle of 2022, and here we are in the middle of 2025, another 3-year cycle. 3-year cycles are very common in the forex world, so it all ties together quite nicely.
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