EUR/CHF: European Union summit could set the tone – Rabobank
|According to analysts from Rabobank, the European Union summit on Friday could set the tone for the EUR/CHF pair. The forecast the cross at 1.06 in a three-month view.
Key Quotes:
“Current levels are a far cry from the 5 year lows around the 1.05 level that were trading in May. The softer tone in the safe haven CHF since May suggests that the market has built-in a fair amount of optimism regarding the prospects of improved coordination in the EU.”
“While the SNB’s policies will continue to chip away at CHF strength, we have argued for years that an improvement in the political backdrop in the Eurozone would be a sure path towards a weaker CHF. Historically the safe haven CHF has been particularly sensitive to Eurozone affairs. The push higher in EUR/CHF since May suggests that there is a fair degree of good news priced-in regarding increased coordination in Europe.”
“EU summit could set the tone for EUR/CHF. The recent high is close to EUR/CHF 1.0915. Our 3 month EUR/CHF forecast stands at 1.06 but we would be looking to push this higher based on the outcome of tomorrow’s summit.”
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