Credit Agricole CIB Research discusses CHF outlook and maintains a bearish view, expressing that via staying long EUR/CHF* targeting a move to 1.1950.
"The CHF has been capped as of late, regardless of the continuing uncertainty regarding Italy. Looking ahead, this is unlikely to change. After all, the SNB’s aggressive policy mix consisting of negative rates and currency intervention if needed should keep the CHF’s safehaven appeal low at these levels.
This is especially true as more sustained currency upside would increase downside risks to inflation, while the central bank has recently lowered its longer-term inflation forecasts again.
Although such conditions are likely to prevent fresh CHF buying interest from rising, balanced speculative positioning implies there is little scope for position-squaring-related currency upside," CACIB argues.
*Recorded in eFXplus Orders