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Analysts at ING think EUR/CHF could drift lower for at least two European political reasons: (1) it’s hard to argue that the stand-off between the Italian government and Brussels will be resolved anytime soon and (2) it’s highly unlikely that a solution to the Brexit negotiations will be found as early as this week.

Key Quotes

“On the other hand, despite a fairly muted week on the Swiss macro side, we see some upside risk on EUR/CHF to partly offset a more bearish outlook stemming from potential negative headlines on complicated negotiations between Switzerland and the EU for the market equivalence of Swiss stock exchange.”

“As our economist Charlotte de Montpellier suggests, the chances of reaching an agreement is at stake and the Swiss financial system could run into difficulty should an agreement not be reached early next year. Messy European politics usually means a lower EUR/CHF – but with Switzerland caught up in the mess, stability around 1.13-1.14 looks the most likely outcome.”