Following the latest Bank of Canada meeting, the central bank maintained a cautious tone but refrained from committing to further easing highlighting persistent inflationary pressures, especially in services and housing. The statement acknowledged that underlying inflation remains sticky and that any rate cuts will be gradual and data-dependent.

In contrast, the Swiss National Bank has already initiated rate cuts and remains one of the more dovish central banks among the majors. The SNB is not only comfortable with easing, but also has historically intervened to weaken the Swiss franc in the face of excessive strength especially when inflation is contained, as it currently is in Switzerland.

Canada is still battling inflation and taking a cautious approach to easing.

Switzerland is easing more proactively and has room to stay dovish.

Add to that Canada’s commodity-linked economy, which could benefit if oil and broader risk sentiment remain supportive. Meanwhile, Switzerland’s low-yield environment makes the franc less attractive during risk-on phases, especially when yields elsewhere remain elevated.

As a result, CADCHF looks well-positioned to trend higher, particularly if global risk appetite holds and BoC stays patient while the SNB continues to cut or signals further easing.

BUY LIMIT CADCHF

Jul 31 2025