Inflation is an issue for the Swiss National Bank (SNB). As the European Central Bank (ECB) seems more hesitant, the EUR/CHF pair is set to extend its downfall, economists at Commerzbank report.

The SNB is seen to be fighting inflation

“The SNB is likely to hike its key rate again at its meeting this month. It is likely to be of secondary importance for the FX market how large the step will be on 22nd September, what is more important is the fact that the SNB is seen to be fighting inflation, which is likely to support the franc.”

“Even though the ECB too will hike its rates next week, which might support the euro short-term, the ECB still seems comparatively hesitant. Moreover, economic concerns and the risk of an energy crisis are likely to put pressure on EUR so that EUR/CHF is expected to trade at lower levels over the coming months.”