The Swiss franc returned to be an interesting currency: one that more or less free floats and can be traded in a relatively similar fashion to other ones.
So what’s next for USD/CHF and EUR/CHF? Here is the view from CBA:
Here is their view, courtesy of eFXnews:
The following is CBA’s thoughts on today’s SNB surprise move to discontinue the 1.20 EUR/CHF floor.
Looking ahead, the decision by the SNB will see the CHF revert to trading in line with its fundamentals. On that front, we expect the CHF to remain firm.
When Switzerland ‘s large current account surplus is overlayed with the Eurozone ‘s economic underperformance, and the ECB ‘s increasingly expansionary monetary policy settings, EUR/CHF looks to to stay near parity or below over coming months.
Driven by the diverging monetary policy trends between the US Fed and the ECB and BoJ, higher relative front -end US swap rates and the US economies relative strength, we continue to expect the USD to appreciate over 2015. The pick -up in the USD and a further widening in the US -Swiss two -year yield spread should see USD/CHF grind back up over the course of 2015 (chart 7). A rebound in USD/CHF above the 200 -day moving average (0.9286) is probable, in our view.
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