Commerzbank: Possibilities of Upside Potential in EUR/CHF Strengthen as Swiss Inflation Continues to Plummet
Inflation in Switzerland has eased, limiting the need for further rate hikes. Instead, a fall in inflation may increase tolerance for Franc depreciation, offering upside potential for EUR/CHF.
Commerzbank Economists Analyze SNB Policy Outlook and Its Impact on EUR/CHF Pair
Swiss National Bank’s Willingness to Accept EUR/CHF Depreciation to Increase
“A further rate hike at the SNB’s meeting next week is likely to be a fait accompli. A further significant tightening beyond that hardly seems credible though.”
“A lot can happen until the SNB’s next meeting in September, of course, but in view of the fact that inflation in Switzerland has recently eased more than the SNB had expected and was close to the upper limit of 0-2% at 2.2% in May means that the need for further rate hikes seems limited. Instead, a further fall in inflation is likely to increase the SNB’s tolerance for Franc depreciation so that we see increased possibilities on the upside as regards EUR/CHF.”
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Written by
Vinit Makol
Lead Strategist and Market Analyst at Edge-Forex
Vinit Makol is a forex trader, strategist and market analyst with more than 20 years of experience in forex and financial markets.
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