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Oct 08 - 02:55 PM

EUR/CHF: ECB-SNB Policy Divergence Favors The Franc; Targeting 1.0650 N-Term - Credit Suisse

By eFXdata  —  Oct 08 - 01:30 PM

Credit Suisse discusses EUR/CHF outlook and sees a scope for a move towards 1.0650 over the near-term.

"The SNB kept its monetary policy unchanged in Q3 and hasn’t recently intervened in FX markets, with sight deposits going sideways. Meanwhile, the Swiss trade surplus hit a record high in August. The ECB’s balance sheet expansion, on the other hand, will likely continue until its newly defined inflation target is met. We expect a higher APP once PEPP finishes...We continue to aim for 1.0650 in EURCHF," CS notes. 

The risk to our view is that inflation in the euro area is non-transitory, which could trigger a hawkish repricing of the ECB’s policy rate path.

Source:
Credit Suisse Research/Market Commentary

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