Christin Tuxen, Chief Analyst at Danske Bank, sees the cross inching higher and re-test the critical 1.20 region within a year’s view.
Key Quotes
“While CHF has proved surprisingly resistant to Italian risks and the equity sell-off recently, we stress that the risk of further Italy-EU confrontation as well as Brexit negotiations setbacks remain likely. This should weigh on EUR/CHF short term. The SNB will remain reluctant to change its communication in light of the stubbornly subdued inflationary pressure and a still-distant first hike from the ECB. In the absence of new political risks, this should allow EUR/CHF to re-invoke on a gradual move back towards 1.20 in 12M. It is likely to require a clear dip below 1.10 for the SNB to start intervening on a larger scale”.
“We have left our EUR/CHF profile unchanged, and still look for 1.13 in 1M, 1.13 in 3M, 1.16 in 6M and 1.20 in 12M”.
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