The value of the Swiss franc (CHF) has fallen by 1.2% after the “surprising” rate cut by the SNB. Rabobank economists analyze the prospects for the CHF.
EUR/CHF six-month forecast of 0.9800 ahead of three-month view
The SNB's decision to lower rates this month will likely increase the likelihood that the CHF can be used as a funding currency, especially if the SNB signals that it is willing to match the ECB's rate cuts this year.
Although there are several fronts where safe haven demand could reappear in the medium term, we expect volatility to increase towards the end of the year with the US elections. That said, for now the CHF is likely to remain weak.
We have moved from our previous six-month forecast of 0.9800 EUR/CHF to a three-month forecast.
Source: Fx Street
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