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19 Mar 2015
EUR/CHF could see a recovery towards year-end – Danske Bank
FXStreet (Edinburgh) - Analysts at Danske Bank expect the cross to push higher in the last part of the year, helped by a better tone from the euro.
Key Quotes
“The CHF is now subject to much less predictable SNB policy moves and we believe the SNB will have to do more (rate cuts and/or intervention) to match the ECB’s QE”.
“With inflation dropping further the SNB has an increasingly hard task justifying the significantly overvalued CHF, which in addition weighs on economic growth via lower exports”.
“While the ‘Grexit’ risk diminished in March, the uncertain political situation in Russia still adds to downside potential in EUR/CHF”.
“The cross could nevertheless be in for a turn later in the year when a EUR recovery materialises and the SNB keeps rates firmly negative and continue to signal its will to intervene to fight the well-established Swiss deflation issue”.
Key Quotes
“The CHF is now subject to much less predictable SNB policy moves and we believe the SNB will have to do more (rate cuts and/or intervention) to match the ECB’s QE”.
“With inflation dropping further the SNB has an increasingly hard task justifying the significantly overvalued CHF, which in addition weighs on economic growth via lower exports”.
“While the ‘Grexit’ risk diminished in March, the uncertain political situation in Russia still adds to downside potential in EUR/CHF”.
“The cross could nevertheless be in for a turn later in the year when a EUR recovery materialises and the SNB keeps rates firmly negative and continue to signal its will to intervene to fight the well-established Swiss deflation issue”.