EUR/CHF set to remain under pressure - Danske Bank

Matías Salord FXStreet

According to analysts from Danske Bank, the EUR/CHF pair is set to be under continued pressure from broad-based US Dollar weakness and a Swiss National Bank that is increasingly cornered by a dovish European Central Bank.

Key Quotes:

“EUR/CHF is closing in on levels where SNB might step in, which could limit USD/CHF downside too. Our medium-term bias remains for the cross to edge higher on fundamentals but risks remain skewed towards CHF strength near term, as monetary-policy constraints bite and central-bank credibility is set to be tested.”

“If we are right that the ECB will deliver a significant easing package at the September meeting, it will surely put pressure on the SNB to follow suit, i.e. go further negative and possibly expand its balance sheet further. However, that, the SNB (1) revealed its distaste for balance-sheet expansion when abandoning the EUR/CHF floor in January 2015 and (2.) may be closing in on a tipping point for where more negative rates could become counterproductive implies that markets could test the SNB’s willingness and ability to deliver. This could send EUR/CHF towards 1.10 again.”

“We keep our near-term forecast of EUR/CHF at 1.11 in 1M and 1.11 in 3M and stress that risks to this are asymmetric and on the downside here; we keep our 6M and 12M forecasts unchanged at 1.13 and 1.15, respectively.”

Author

Matías Salord

FXStreet

Matías started in financial markets in 2008, after graduating in Economics. He was trained in chart analysis and then became an educator. He also studied Journalism. He started writing analyses for specialized websites before joining FXStreet.

EUR/USD climbs to daily highs near 1.1820

EUR/USD now picks up pace and advances to the area of daily peaks north of the 1.1800 barrier at the end of the week. The pair’s decent move higher comes against the backdrop of a generalised lack of direction in the FX galaxy and the mild offered stance in the US Dollar.

GBP/USD trims losses, retests 1.3460

After briefly challenging its key 200-day SMA near 1.3440, GBP/USD now manages to regain some balance and revisit the 1.3460 zone on Friday. Cable’s pullback comes as the selling pressure on the Greenback gathers traction, reigniting some recovery in the risk-linked space.

Gold flirts with four-week highs past $5,200

Gold extends its rebound, climbing for a third consecutive session and pushing back above the $5,200 mark per troy ounce on Friday. The move higher continues to draw support from lingering geopolitical tensions and the ongoing uncertainty surrounding US trade policy, both of which are keeping safe-haven demand firmly in play.

Bitcoin, Ethereum and Ripple consolidate with short-term cautious bullish bias

Bitcoin, Ethereum and Ripple are consolidating near key technical areas on Friday, showing mild signs of stabilization after recent volatility. BTC holds above $67,000 despite mild losses so far this week, while ETH hovers around $2,000 after a rejection near its upper consolidation boundary.

Changing the game: International implications of recent tariff developments

The Supreme Court ruling on International Emergency Economic Powers Act (IEEPA) tariffs provides limited relief for the rest of the world, with weighted average tariff rates modestly lower.

Starknet unveils strkBTC, shielded Bitcoin transactions on Ethereum Layer 2

Starknet, the Ethereum Layer 2 network developed by StarkWare, today announced strkBTC, a wrapped Bitcoin asset that introduces optional shielding while preserving full DeFi composability.