EUR/CHF: Easing Franc on prospects of reduced SNB activism – CIBC

Economists at CIBC Capital Markets expect the Swiss Franc to soften as the SNB is set to moderate FX activity.

Moderating SNB intervention to ease CHF overvaluation 

The SNB shifted towards actively encouraging a stronger CHF in Q2 2022. However, we would expect the SNB to moderate FX activity as inflationary pressures remain contained and export competitiveness remains challenged, the OECD estimates that the CHF is the most overvalued major versus the EUR.

The prospect of reduced SNB activism, allied to an eventual easing in CHF safe haven demand points towards a graduated reduction in Swiss valuations.

EUR/CHF – Q4 2023: 0.96 | Q1 2024: 0.97