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The SNB will remain very sensitive about the relative position of the CHF and, therefore, economists at Rabobank expect the Swiss National Bank to intervene using QE. The EUR/CHF pair is set to trade at 1.07 by end-2020.

Key quotes

“Our expectation is that risk appetite could decline into Q4 suggests scope for the safe-haven CHF to appreciate and for continued intervention by the SNB in the FX market.”

“Looking ahead, we see scope for some of the optimism that buoyed the EUR this summer to fade amid fears about a second wave of COVID-19 in European and given concerns about a delay to the EU’s recovery fund.”

“Irrespective of the threat of further SNB FX intervention, we see the potential for a drop in risk appetite suggests scope for EUR/CHF to edge lower to 1.07 by the end of the year.”