EUR/CHF: Swiss franc to weaken versus euro over time – Wells Fargo
|Analysts at Wells Fargo point out the Swiss National Bank held monetary policy steady, with no indication about moving to a less accommodative monetary policy stance for the foreseeable future. The see that moderate Swiss growth and inflation, in combination with some improvement in global economic and market sentiment over time, should see the franc soften versus the euro.
Key Quotes:
“Switzerland's monetary policy announcement had a very familiar feel to it as the Swiss National Bank (SNB) maintained its accommodative monetary policy stance and gave no hint of any change in policy for the foreseeable future. The SNB held its policy rate at -0.75%, and said the Swiss franc remains highly valued. The central bank said it "remains willing to intervene in the foreign exchange market as necessary, in order to counter upward pressure on the Swiss franc."
“Both Swiss growth and inflation have shown firmer trends in 2021, with both headline and core inflation rising at their fastest pace in more than two years. However, as this week's announcement makes clear, the uptick in inflation in particular is still modest.”
“With many other G10 central banks moving towards less accommodative policy (at varying speeds), an outlook for rising global yields, and should COVID concerns recede as 2022 progress, that should translate to an underwhelming performance from the Swiss currency. We expect the franc to soften versus the euro over time, and we target a EUR/CHF exchange rate of CHF1.0950 by the end of 2022.”
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.