EUR/CHF: Safe haven demand for the CHF in periods of political tension in the Eurozone – Rabobank

Thursday is shaping up to be a crucial day for the outlook on the EUR with the preliminary April PMI data due for release and EU leaders holding a video summit, per Rabobank. EUR/CHF trades at 1.0517. 

Key quotes

“The stakes are particularly high going into the EU summit on Thursday. Given the difficulties associated with finding an agreement coupled with the rising economic headwinds, we expect the EUR to come under further pressure.”

“We have frequently argued that for the SNB, its holy grail of a weaker CHF is likely to be found in a strong and politically coherent Eurozone economy which would draw FX flows into the EUR and away from the CHF.”

“We see scope for EUR/CHF edging to 1.04.”