EUR/CHF could reach 1.10 in the medium term – Danske Bank

Jens Pedersen, Senior Analyst at Danske Bank, believes the Swiss Franc could depreciate towards the 1.10 area vs. its European peer in the medium term.

Key Quotes

“Political uncertainty in Europe, coupled with rising geopolitical risks following the election of Donald Trump as the next US president, has supported CHF and put pressure on SNB to act to curb CHF appreciation pressure”.

“However, data for sight deposits following the election suggest that inflow into CHF has not been significant compared with, for example, Brexit”.

“EUR/CHF has been trading close to 1.07 since the US election. We expect it to stay here in the near term as focus turns to European political uncertainty. Longer term, we continue to expect fundamentals to support a higher EUR/CHF and keep our 6M and 12M forecasts unchanged at 1.10 and 1.13, respectively”.