Societe Generale Research discusses CHF outlook over the coming year and targets EUR/CHF at 1.11 and USD/CHF at 0.87 by end of 2021.
"As global growth recovers in 2021, the CHF is expected to grind slowly lower. EUR/CHF should appreciate towards 1.10 in the wake of EUR/USD upside and possibly faster than we expect if the EU recovery fund is activated," SocGen notes.
"Since global growth remains weak and it will take months to distribute a COVID vaccine widely, bouts of risk aversion in early 2021 are likely to revive demand for safe currencies, including the franc. In this context, USD/CHF faces shortterm risks. The pair looks especially vulnerable given that the correlation between the CHF and VIX has just turned negative, a dislocation that is usually short-lived," SocGen adds.