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31 Mar 2015
EUR/CHF around 1.10 by tear-end – BAML
FXStreet (Edinburgh) - According to analysts at BAML, EUR/CHF could be headed towards the 1.10 level by end 2015.
Key Quotes
“We maintain our forecasts unchanged, targeting 1.10 by the end of the year”.
“The effects of the recent CHF strength on the Swiss economy will take time to fully manifest, although sentiment data has already shown declines, and companies are reporting steps to deal with CHF strength, including layoffs”.
“The negative deposit rate appears to have had some effect already, and if even some money flows out of Switzerland that will gradually weaken CHF”.
“We would also expect the SNB to take further action, whether by FX intervention, another small rate cut or other measures if inflation data disappoints even the new, lower estimates and if ECB easing causes continued CHF strength vs EUR”.
“We continue to see greater potential in long USD/CHF, as policy divergence between the Fed and the SNB widens further”.
Key Quotes
“We maintain our forecasts unchanged, targeting 1.10 by the end of the year”.
“The effects of the recent CHF strength on the Swiss economy will take time to fully manifest, although sentiment data has already shown declines, and companies are reporting steps to deal with CHF strength, including layoffs”.
“The negative deposit rate appears to have had some effect already, and if even some money flows out of Switzerland that will gradually weaken CHF”.
“We would also expect the SNB to take further action, whether by FX intervention, another small rate cut or other measures if inflation data disappoints even the new, lower estimates and if ECB easing causes continued CHF strength vs EUR”.
“We continue to see greater potential in long USD/CHF, as policy divergence between the Fed and the SNB widens further”.