Analysts at CIBC, see the EUR/CHF moving modestly to the upside over the next quarters and see it at 1.11 by the third quarter of next year.
Key Quotes:
“For twenty months now, the realized volatility for USD/CHF has been negligible. Moreover, the pair has essentially been oscillating around par for the better part of the last four years. That sleepy trend for CHF looks likely to continue.”
“In terms of the endogenous backdrop, the SNB appears to be far from shifting policy. In its last meeting, the Bank noted that its negative policy rate is offsetting the upward impact of its current account on the CHF. But in addition, prolonged low rates are also having an effect on Switzerland’s mortgage and real estate markets. As a result, expect any potential policy changes to be focused on interest rate tiering and bank capital rather than explicit rate hikes, which the Bank will likely forego, unless rate differentials with the Eurozone widen out further.”
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