With inflation running below the 2% target threshold, and forecasts pointing towards CPI remaining well below target through 2024, implies increasing SNB restraint regarding the extension of support for an overly strong CHF. 

We assume that the SNB will remain reticent to further tighten policy, from the current 1.75%, in part due to weakening macro fundamentals and ongoing real estate concerns. 

Macro headwinds, allied to policy inertia and a rowing back in SNB currency support point towards CHF gains gradually unwinding.

EUR/CHF – Q4 2023: 0.97 | Q1 2024: 0.98