EUR/CHF to extend its losses towards the 0.98 zone in the coming weeks – Rabobank

Earlier today EUR/CHF dipped below the 1.00 level, only pulling back on fear of Swiss national Bank (SNB) intervention. Economists at Rabobank view the euro as vulnerable and can not rule out a break of EUR/CHF below parity and towards the 0.98 area in the coming weeks.

The SNB maintains FX intervention as a tool

“The SNB this morning stated that it takes the overall currency situation into control and that individual currency pairs do not play an special role. This highlights the importance of the effective exchange rate vs. EUR/CHF for policymakers. Even so, the SNB also reiterated its readiness to intervene in the FX market if necessary.” 

“Given that politicians have warned that the situation in Ukraine could take months to resolve, we see scope that EUR/CHF can fall further in the coming weeks and see scope for a drop towards the 0.98 area. That said, parity remains a key support level.”