Eurchf Unlikely To Turn Higher

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Eurchf Unlikely To Turn Higher

Eur/Chf Unlikely To Turn Higher

Rabobank analysts have issued a forecast for the EUR/CHF, and they have cited that the pair is unlikely to turn higher. According to them, the EUR/CHF is likely to stay in the same familiar trading range for the medium-term.

If we look back, the Swiss Franc (CHF) briefly became the best-performing currency in the G10 due to a sudden fall in the JPY's value. However, this is not something that will be welcomed by the SNB, according to the Rabobank.

Eur/Chf To Return Back To 0.95

Rabobank believes that there's a high chance that the EUR/CHF will revisit the 0.95 area in the medium term. In the last 36 hours, the market conditions have settled down, which means there is more weakness for the CHF as the save-haven asset flows will reverse.

This is a sign that the CHF will continue to receive a good portion of the funds moving into the save haven assets category. During the 1H2024, the CHF remained in a weakening trend against the Euro.

However, the CHF is likely to turn softer in the medium term. But that's not bad; it is entirely the opposite... Swiss exporters will actually enjoy a weak CHF.

If we look at the value of EUR/CHF from May, it becomes clear that the pair has almost reversed most of its upside rally during the first five months of 2024.

Only the month of June was an exception, as that's when the EUR/CHF turned higher. At that time, the rate cut by the SNB had a limited impact on the pair as the ECB also announced its policy change in the same month.

Once the turmoil in the market has settled down, the EUR/CHF will return back to the 0.95 region. Looking ahead, a September rate cut from the SNB is on the cards but the flow of funds into save haven assets will limit any upside in the EUR/CHF.

Against this backdrop, Rabobank believes that the trading range for the EUR/CHF will be between 0.95 - 0.96.

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