Credit Suisse are out with revised forecasts for EUR/CHF in a client note today.
- To 1.04 in three months (from 1.00 previously)
- Maintain the 12-month forecast at 1.00
- Says this implies USDCHF at 0.955 in three months and 0.98 in 12 months based on our EURUSD projections of 1.09 and 1.02 over the same horizons
The note goes on:
We acknowledge large uncertainty around our projections
- Our revisions take into account signs of more active SNB FX policy and more effective negative interest rate market pass through than we initially assumed
- However, market concerns over SNB’s balance sheet constraints, the home bias of domestic investors and our assumption the EUR will fall materially suggest to us EURCHF could remain under some downward pressure
- We would be willing to re-consider current EURCHF levels as a more sustainable market equilibrium if they can persist without SNB’s sizeable FX intervention support, something which upcoming sight deposit data should clarify
EUR/CHF above 1.05 still:
