The last two months have witnessed a substantive grind lower in EUR/CHF. In the view of economists at ING, the Swiss franc may stay supported on unstable risk sentiment.

A good Omicron hedge

“In the current market environment, it’s hard to imagine the Swiss franc losing any support. Its role as the quintessential risk hedge to European risk makes it an attractive currency as Omicron cases and potential closures rise in the region.”

“The SNB looks set to keep intervening in the FX market to curb CHF appreciation, but it might not draw a line in the sand in EUR/CHF (eg, at 1.04) given the very choppy risk environment. We see more downside risks to the pair into January.”