USD/CHF has recovered over the past two weeks; however the franc has continued to trade firmer against the EUR.
SNB Jordan’s speech last week saw the President reiterate that the franc remains ‘considerably overvalued’ against the EUR and that the SNB stands ready to intervene if necessary. He also stated the importance of the ECB’s monetary policy decision given that it strongly affects the SNB.
So while the EUR could come under pressure on expectations of further ECB easing in March, we would expect EUR/CHF downside to be limited, supported by the SNB’s aggressive policy stance.
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