Synopsis:

Credit Agricole recommends buying USD/CHF on dips in 2025, driven by expectations of a more dovish SNB, a strong USD backdrop, and tariff risks facing Switzerland.

Key Points:

1. Selective USD Bullishness:

   • Credit Agricole remains bullish on the USD, especially against overvalued currencies with dovish central banks.

2. CHF Weakness Drivers:

   • Overvaluation: The CHF is currently the most expensive G10 currency.
   • SNB Policy Shift: The SNB is expected to adopt the most dovish stance among G10 central banks in 2025.
   • Economic Risks: Potential US tariffs could hit the Swiss economy more severely due to its export dependency.

Conclusion:

With the CHF’s overvaluation, a likely dovish SNB policy shift, and Switzerland’s vulnerability to US tariffs, Credit Agricole recommends buying USD/CHF on dips, anticipating further upside in 2025.