CHF: SNB is likely near the end of its easing cycle – UBS

USD/CHF to fall back toward 0.87

“We believe the Swiss National Bank (SNB) policy rate is now closer to its terminal value after two cuts this year amid a decrease in underlying inflationary pressure, with one final cut likely in September.”

“This means the CHF should appreciate against both the US dollar and EUR over the next 12 months as the Fed and the European Central Bank (ECB) ramp up monetary policy easing.”

“The narrowing rate differential between the US and Switzerland should allow USD/CHF to fall back toward 0.87, from around 0.896 at present, while political uncertainty and fiscal consolidation in Europe should support safe-haven flows to the franc.”

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