EUR/CHF seen at 1.2300 in 12-month – Danske Bank

Christin Tuxen, Chief Analyst at Danske Bank, expects the Swiss Franc to depreciate towards the 1.23 area vs. the single currency within a year’s horizon.

Key Quotes

“While the ECB has entered ‘normalisation’ mode, the SNB has been keen to stay out of ‘exit’ discussions and used every opportunity to stress that it is in no hurry to quit negative rates and that intervention remains a policy tool”.

“Indeed, the SNB is keen to embrace the pricing of an eventual ECB exit from negative rates and QE and a continued uptick in EUR/CHF with it. As the SNB has confirmed it remains in the ‘no exit now’ camp, we deem the central bank will prefer to see EUR/CHF edge towards 1.20 before making a major shift in its policy stance as currency help on inflation remains much needed”.

“We have kept our forecast profile unchanged and thus continue to see the cross at 1.15 in 1M and in 3M, 1.18 in 6M, and 1.23 in 12M”.