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The Swiss National Bank (SNB) is set to reiterate its dovish stance and willingness to intervene at its Monetary Policy Assessment on December 17. Regarding the outlook for the Swiss franc, economists at Credit Suisse stick to the 1.09 target in EUR/CHF.

Key quotes

“We do not expect any significant policy changes resulting from the SNB. Most likely, the central bank will leave its policy rate unchanged at -0.75% and reiterate its dovish message from the September 24 meeting. We believe the SNB will remain willing to intervene in the foreign exchange markets as it still deems the Swiss franc as highly valued.”

“We still stick to our initial 1.0900 target in EUR/CHF. In a more optimistic scenario, we could even see the pair reaching 1.1000 after that. Our optimistic view is based on the expectation of an economic recovery in the Eurozone once the impact of the COVID-19 vaccines shows their first positive results in sentiment and hard data releases.”

“The threat of continued SNB FX interventions should keep rallies in the Swiss franc limited. Nevertheless, we would consider ourselves wrong at levels below 1.0645 in EUR/CHF.”