The better tone in the euro has allowed EUR/CHF to move higher in recent sessions. Economists at Rabobank expect the pair to hover around the 1.02/03 region as the European Central Bank (ECB) will be unable to hike rates amid a European oil embargo on Russia.

SNB may be able to execute a little bout of policy tightening

“Under the cover of ECB rate hikes, the SNB may be able to execute a little bout of policy tightening of its own to pull its key rate back towards zero without creating too many waves for the EUR/CHF exchange rate. That said, while currency strength was a problem for the SNB when inflationary pressure was low, it is unlikely to be viewed in the same way in the current environment.” 

“We think that there will be an EU oil embargo on Russia. This could make a recession unavoidable for the eurozone and make the window of opportunity for ECB rate hikes very limited. In this scenario, safe-haven demand would likely keep EUR/CHF close to the 1.02/1.03 area in the months ahead.”