EUR/CHF seen at 1.23 in 12-month – Danske Bank

Chief Analyst at Danske Bank Christin Tuxen expects the cross to edge higher towards the 1.23 area within a year’s view.

Key Quotes

“While the ECB has entered ‘normalisation’ mode, the SNB has been keen to stay out of ‘exit’ discussions and used every opportunity to stress that it is in no hurry to quit negative rates and that intervention remains a policy tool. Indeed, the SNB is keen to embrace the pricing of an eventual ECB exit from negative rates and QE and a continued uptick in EUR/CHF with it”.

“As the SNB has confirmed it remains in the ‘no exit now’ camp, we believe the central bank will prefer to see EUR/CHF edge towards 1.20 before making a major shift in its policy stance, as currency help on inflation remains much needed”.

“We have kept our long-term forecast profile unchanged and thus continue to see the cross at 1.23 in 12M. However, the latest euro momentum has led us to up our 1M forecast to 1.17, 3M to 1.17 (previously 1.15) and 6M to 1.20 (unchanged). Thus, the SNB could be ready to make a shift in stance in H2”.