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- EUR/CHF to remain at levels below parity going forward – MUFG
EUR/CHF to remain at levels below parity going forward – MUFG
The Swiss Franc is the top performing G10 currency after the US Dollar. Economists at MUFG Bank expect the EUR/CHF to remain below parity in the coming months.
SNB hikes but intervention a tool also
“The SNB hiked by 50 bps, taking the key policy rate to 1.00%. So despite a policy rate that is much lower than elsewhere, the SNB also stepped down the pace from 75 bps at the last meeting in September and signalled the potential for further hikes going forward. The stepdown in pace was well justified though with inflation in Switzerland much more under control than elsewhere.”
“The SNB can also play a key role in influencing expectations of CHF direction. SNB President Jordan stated that the SNB bought CHF for monetary policy purposes. Holding over USD800 bn of foreign currency to sell will act as a powerful influence in keeping the Franc strong in 2023.”
“We see EUR/CHF remaining at levels below parity going forward.”
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