It is too early for higher EUR/CHF rates – Commerzbank

FXStreet Insights Team FXStreet

Economists at Commerzbank discuss the SNB policy outlook and its implications for the Swiss Franc (CHF).

Inflation in Switzerland: target reached?

For some months now price data in Switzerland has been moving in the right direction, as was the case again in June. Does that mean that the subject of inflation is over in Switzerland? Of course, it is still too early for that, as the SNB repeated frequently there is the risk of second-round effects. Wages might rise further thus fuelling inflation once again.

The SNB itself expects only a short-term decline in inflation rates. According to SNB projections consumer price inflation will be above the target corridor again next year.

As a result, the SNB is likely to remain vigilant and a continued hawkish approach seems likely. In this context, it will continue to prefer a strong Franc. It is therefore too early for higher EUR/CHF rates.

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