EUR/CHF NOT TO TREND HIGHER MEDIUM-TERM – RABOBANK
The overnight fall in the value of the JPY briefly left the CHF as the best performing G10 currency over the past five sessions this morning. In our view, this is not an accolade that the SNB will have welcomed, Rabobank’s senior FX strategist Jane Foley notes.
EUR/CHF to return to the 0.95 area
“We expect that the more settled market conditions of the past 36 hours or so will allow the CHF to continue to soften as some safe haven flows reverse. These factors suggests that the CHF is likely to continue finding good support from haven flows in the coming months. For much of the first half of this year, the CHF was in a weakening trend vs. the EUR.”
“The softer CHF will have been good news for Swiss exporters. Since very late May, the value of EUR/CHF has more or less reversed all of the move higher in the first 5 months of the year. EUR/CHF trended higher in late June, buy arguably the overall impact of the SNB’s June rate cut was limited by the ECB’s policy announcement in the same month.”
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