Credit Agricole CIB Research discusses CHF outlook and adopts a sell-on-rallies strategy, expressing that via staying short CHF against GBP (long GBP/CHF).
"We expect the CHF to remain subject to gradual depreciation and rallies to prove a sell. We continue to target the EUR/CHF cross at 1.19 by the end of 2018 and 1.23 by end-2019. As a result, we see low risk of the SNB communicating a change to its policy mix anytime soon. With the balance sheet having stabilised over the past few quarters, there is also little risk of political pressure on the central bank increasing," CACIB argues.
"Even though falling Brexitrelated uncertainty is needed in order to realign the GBP with more supported rate market developments, we keep a positive view on the currency. As such we remain long GBP/CHF as a trade recommendation," CACIB adds.