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- CHF: Stabilizing; risk-reward favors long EUR/CHF for l-term Investors - Credit Agricole
CHF: Stabilizing; risk-reward favors long EUR/CHF for l-term Investors - Credit Agricole
eFXdata reports that Credit Agricole Research discusses CHF outlook and maintains a structural long EUR/CHF position* through year-end targeting a move towards 1.15.
"The CHF has been stabilising for most of the past few weeks, regardless of speculative buying interest remaining high as implied by our FX positioning gauge. After all, it appears that the SNB stepping up FX intervention has been successful so far in offsetting increased safe haven buying as driven by coronavirus-related uncertainty," CACIB notes.
"Weakening fundamentals as for instance reflected in further slowing inflation developments are putting the central bank in a comfortable position to stick to an aggressive monetary policy stance in the foreseeable future. However, sustainably improving global risk sentiment is needed in order to trigger lasting CHF downside. In the meantime, the SNB's policy stance should continue to act as backstop. Such conditions should still leave risk reward in favour of long-term oriented EUR/CHF longs. Hence, we stick to our trade recommendation," CACIB adds.
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