EUR/CHF climbs back towards 1.20
|After hitting 1.1368 at the beginning of the summer, EUR/CHF has been climbing its way back to 1.1696. However, the currency pair is still well below the multi-year high that was reached at the beginning of the second quarter. Indeed, the currency pair passed the 1.20 threshold before grinding towards 1.1368 amid the nomination of the new Italian government, mounting trade war fears and an unexpectedly dovish ECB.
The recovery in EUR/CHF is therefore exclusively due to the improvement in risk sentiment rather than the strengthening of the single currency. SNB kept a stiff upper lip and didn’t change a thing in its strategy. Total sight deposits held within the SNB have been quite stable since mid-2017, which suggest that the SNB didn’t intervened in the FX market; after all, EUR/CHF is well outside the danger zone.
Stay on top of the markets with Swissquote’s News & Analysis
The Swiss National Bank will maintain its wait-and-see approach and will let the ECB be the first mover. For now the market, is expecting Mario Draghi to start raising rates in mid-2019. With risk sentiment improving across the board, the recovery in EUR/CHF should continue. However, trade tensions between the US and its main trading partners remain of major concern for investors. A quick deterioration in market environment could ignite a CHF appreciation. We maintain our objective of 1.20 for the end of the summer.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.