EUR/CHF to recover over the next quarters – Danske Bank

According to analysts from Danske Bank, the euro will move higher against the Swiss franc over the next twelve months. They see EUR/CHF trading at 1.12 in twelve months. 

Key Quotes: 

“EUR/CHF has seen some relief from political risks abating – both Brexit and trade woes – but the underlying pressure for franc appreciation remains, as the SNB struggles to convince markets about its ability to create inflation. Swiss CPI growth is back in negative and even with a moderate eurozone recovery, it will continue to be difficult to circumvent the fundamental (nominal) drift lower in EUR/CHF. SNB refuses to give in to reversal-rate fears but it is likely to continue being tested in its ability and willingness to cut further into negative.”

“We target EUR/CHF at 1.10 in 1M and 3M (previously 1.09) and keep our longer end profile for the cross unchanged at 1.10 in 6M, and 1.12 in 12M.”