The sudden moves in EUR/CHF over the past days suggest that the SNB is trying to prevent the franc from depreciating with the help of interventions, which would point towards a continued restrictive approach on the part of the SNB. That means EUR/CHF should continue to trade at levels around 0.96 for now.

If price pressure in Switzerland continues to ease, which we assume, the SNB might accept moderate CHF depreciation medium-term, as a strong franc is putting pressure on the economy. Once inflation reaches the level of price stability on a sustainable basis it makes little sense to keep the currency at (artificially) high levels.