#CurrencyPairPrediction Real vs Nominal Rate Differentials in USD/CHF Forecasting In USD/CHF forecasting, nominal interest rate differentials refer to the difference in policy rates or yields between the U.S. and Switzerland, often used in short-term currency models. However, real interest rate differentials—which adjust for inflation—are considered more accurate for longer-term forecasts because they reflect the true return on investments. Nominal Rate Differential: Useful for short-term movements; closely linked to central bank decisions and capital flows. Real Rate Differential: Better for long-term trends; accounts for inflation expectations, providing a more fundamental view of currency valuation. In practice, both are important: nominal rates influence immediate market behavior, while real rates capture underlying macroeconomic forces. Would you like a chart or simple formula comparison as well?