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4 Mar 2015
CHF could face downward pressure towards year-end – BAML
FXStreet (Edinburgh) - In the view of analysts at BAML, the Swiss franc could face increasing selling interest in the upcoming months.
Key Quotes
“We adjust our EUR/CHF forecasts higher, targeting 1.10 by the end of the year”.
“The effects of the recent CHF strength on the Swiss economy will take time to fully manifest, although sentiment data has already shown declines, and companies are reporting steps to deal with CHF strength, including layoffs”.
“Despite the fact that the SNB already expects a downturn in the data, we expect they will be proactive and see risks tilted towards a rate cut at the March meeting, keeping pressure on CHF”.
“We continue to see greater potential in long USD/CHF, as policy divergence between the Fed and the SNB widens further”.
“Furthermore, the painful squeeze of short hedge-fund CHF positions after the SNB removed the floor is now complete according to our proprietary flows and USD/CHF volatility is back to pre-floor removal levels. Any improvement in risk sentiment should support the pair”.
Key Quotes
“We adjust our EUR/CHF forecasts higher, targeting 1.10 by the end of the year”.
“The effects of the recent CHF strength on the Swiss economy will take time to fully manifest, although sentiment data has already shown declines, and companies are reporting steps to deal with CHF strength, including layoffs”.
“Despite the fact that the SNB already expects a downturn in the data, we expect they will be proactive and see risks tilted towards a rate cut at the March meeting, keeping pressure on CHF”.
“We continue to see greater potential in long USD/CHF, as policy divergence between the Fed and the SNB widens further”.
“Furthermore, the painful squeeze of short hedge-fund CHF positions after the SNB removed the floor is now complete according to our proprietary flows and USD/CHF volatility is back to pre-floor removal levels. Any improvement in risk sentiment should support the pair”.