It has to be either India or Australia. And given the history in ICC tournaments so far, I would rather favor Australia. Steve Smith as the captain has his task cut out. But they are missing most of their strike bowlers. Pace bowling department will be lead by Spencer Johnson, with Sean Abbott and Ben Dwarshuis to support him. Nathan Ellis maybe included in the XI as well. For spin, they have the young and raw Tanveer Sangha to provide backup for Adam Zampa. And in spin-friendly conditions in Pakistan, Travis Head may also be handy.
New Zealand also are in good form and there only major ICC trophy is Champions trophy back in 2000. Like you said earlier that they are performing well in sub-continent, so we can't rule them out. South Africa are also in good form and let's see whether they break there tradition of being 'Chokers' in every ICC Event.
Pakistan preparation for ICC champions trophy are well exposed in recent tri-nation series. With players like Faheem Ahraf and Kushdil shah you can't expect a win in ICC event. Moreover main batsmen and bowler, Babar Azam and Shaheen Shah are out of form.
Not only is the New Zealand team strong with the champion trophy in front of them, but in all the major ICC tournaments, New Zealand has been the favorite and in every tournament, New Zealand has performed very well and in most of the tournaments, they have been beaten by luck in the finals. Since the Champions Trophy usually involves big teams, there is really no room for error. However, New Zealand will start the Champions Trophy as favorites like Australia and India. I have not seen anything to complain about New Zealand's performance against Pakistan and South Africa in the tri-series. As they have done well in bowling, their batting performance has been good enough so if they can play their usual game then they can easily play the Champions Trophy semi-final. If the champions can play the semi-finals of the trophy, they will definitely have a chance to qualify for the finals.