ING Research warns from a scope of EUR/CHF to slide towards 1.03 over the coming months.
"EUR/CHF looks to be one of the primary casualties of the ECB’s new symmetrical inflation targeting regime – which promises lower EUR rates for longer. The ongoing expansion in the ECB’s balance sheet as the ECB prints 100bn of euros per month stands in contrast to the SNB – where FX intervention has slowed. One view here is that the SNB has been warned off the huge FX intervention that it undertook last year (eg, buying CHF50bn in 2Q20) by Washington and its FX surveillance policies," ING notes.
"Low Swiss inflation means the real CHF is not quite as strong as nominal FX rates would suggest. A retest of the 2015 highs in the real exchange rate could mean SNB tolerates 1.03 in EUR/CHF," ING adds.