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EUR/CHF risks are skewed to the downside as the SNB will be tested on its willingness to cut further into negative – something for which the bar remains rather high, per Danske Bank.

Key quotes

“The SNB’s credibility is growing by the day and the pressure to cut deeper into negative remains. But, unless other major central banks go there, we think the SNB will stick to intervention to keep EUR/CHF afloat.” 

“We have kept our EUR/CHF forecasts unchanged at 1.05 in 1-3M, 1.04 in 6M and 1.03 in 12M as we continue to see risks skewed to the downside near-term.”