EUR/CHF is trading below parity. Economists at Commerzbank expect the Swiss franc to continue its appreciation dynamic.

Violent EUR/CHF volatilities expected

“If EUR/CHF levels below parity are accepted by the SNB without intervention, FX traders are likely to take that as an invitation to increase the pace of appreciation. Until the SNB has to intervene with CHF sales after all. Then there should be another jump upward.”

“In the end, violent EUR/CHF volatilities are likely to be the result.”

“I expect increasing CHF appreciation dynamics for the next few days. You can also put it this way: The market should now sound out the SNB pain threshold on the EUR/CHF downside. That's just how the market works when a central bank sets unclear limits for exchange rates.”