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In opinion of Christin Tuxen, Chief Analyst at Danske Bank, the cross is expected to edge higher to the 1.2200 region within a year’s view.

Key Quotes

“EUR/CHF has failed to make a firm break of the SNB’s old 1.20 floor and is currently hovering at levels well below as an Italian debt risk premium has been factored in and the euro has come under pressure from a hiking-hesitant ECB. Both of the latter factors combined with an SNB that is eager to see EUR/CHF on a sustained course above 1.20 before changing its policy stance, will in our view keep the cross below 1.20 for now”.

“We think the SNB will remain reluctant to change its course with the first ECB hike still distant which should allow EUR/CHF to edge gradually higher into 2019 as the era of negative rates slowly grinds to an end”.

“We have lowered our near-term EUR/CHF profile due to the level shift seen on notably Italy lately, and now look for 1.16 in 1M, 1.16 (prev. 1.19) in 3M, 1.19 (1.21) in 6M and 1.22 (1.23) in 12M”.