The Swiss National Bank will likely raise the key rate by 05 basis points again in September and December according to analysts at Danske Bank. They see the EUR/CHF cross at 0.96 in one month, at 0.95 in three months and at 0.93 in twelve months.

Key Quotes: 

“EUR/CHF has moved sharply lower and is currently trading around 0.96. This comes after a month of global yields moving lower and consequently rising recession fears."

“We expect the SNB to hike by 50bp again in September and December to curtail underlying inflation pressures bringing the policy rate to 0.75%. With the SNB broadly following the ECB, we see relative rates as an inferior driver for the cross. We continue to forecast the cross to move lower on the back of fundamentals and a tighter global investment environment. We thus lower our overall forecast profile and now forecast EUR/CHF at 0.93 in 12M.”

“The key upside risks to our forecast are global yield curves steepening amid a shift in the global investment environment and/or the SNB falling behind the curve.”