- AUD/CHF crashed in Q1 2020, but the pair was able to promptly retrace its steps higher.
- However, the pair is currently trailing lower, perhaps for good reason considering the near-term risks.
- Near-term risks include the second wave of COVID-19 as we head into winter, in addition to the U.S. presidential election and Brexit.
- Nevertheless, longer-term sentiment should remain constructive. This matters especially for AUD/CHF, since the inflation-adjusted yield is weak.
- What we could see from AUD/CHF is a "J-curve" effect. The pair might struggle (or begin to trade sideways) in the near term, but its longer-term prospects could be bright, as the pair remains undervalued.
For further details see:
AUD/CHF To Find Strength In The Long Term, In Spite Of Near-Term Risks In 2020