Mikael Milhoj, Senior Analyst at Danske Bank, noted further downside lies ahead for the cross in the near term.
Key Quotes
“EUR/CHF extended the decline initiated after the SNB’s Andrea Maechler comments late last week regarding the challenges facing the SNB still”.
“While CHF has failed to strengthen markedly during times of Italy sell-offs, we stress that the deteriorating Swiss outlook amid still-largely-absent inflation could lead the market to test the SNB’s policy toolbox (little leeway to cut and is it willing to restart interventions?)”.
“This should keep EUR/CHF on the defensive short term”.
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