The SNB now see inflation as more broad-based and cannot rule out further increases in the policy rate. However, economists at Commerzbank continue to see upside pressure in EUR/CHF.

CHF outlook remains unchanged following SNB decision

“What is mainly relevant for the Franc for now is that the SNB sees further need to act as regards inflation. However, we do not assume that the rate hikes will be more aggressive than those of the ECB so that we continue to see upside pressure in EUR/CHF.”

“Of course, it is worth bearing in mind that the SNB once again confirmed its willingness to intervene on the FX market, which is likely to slow EUR/CHF’s upward move.” 

“The inflation data is likely to be decisive when it comes to determining how high the risk for FX market interventions actually is. The higher inflation is, the more cautious traders are likely to become regarding higher EUR/CHF levels.”