EUR/CHF set to correct back up to the 0.9500/0.9600 area – ING
|EUR/CHF clawed back losses last week. Economists at ING analyze the pair’s outlook.
Looking for the correction higher
EUR/CHF looks too low to us. It looks to have traded down to these 0.9200/0.9300 levels on the back of the excessive pricing of the ECB easing cycle. Our team looks for a mere 75 bps compared to current pricing of 150 bps. If we are right – and given that rate differentials have been a bigger driver over recent months – we see EUR/CHF correcting back up to the 0.9500/0.9600 area.
We now expect the SNB to be FX buyers.
Geopolitics is a bearish risk, but macro favours a higher EUR/CHF.
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