EUR/CHF could extend its advance to levels between 1.02 and 1.04 – MUFG

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The crossing EUR/CHF exceeds parity again. MUFG Bank economists believe that the pair could go up to 1.04.

SNB more tolerant of weaker CHF

“The SNB has confirmed that it has recently intervened in support of the franc to prevent a downward movement from reinforcing the upward risks of inflation. Yesterday’s hike could fuel speculation that the SNB is becoming less concerned about upside inflation risks and more tolerant of a weaker CHF.”

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The favorable evolution of growth should encourage the ECB to continue tightening monetary policy at a faster pace in the next monetary policy meetings, in which we expect the official interest rate to reach 3.00% by the end of the first quarter. This leaves room for the EUR/CHF to extend its advance to the levels registered in the first half of last year, when it traded between 1.0200 and 1.0400.”

Source: Fx Street

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