• Home
  • Analytics
  • Market News
  • EUR/CHF: SNB does not find love in prices – Rabobank

Market news

14 February 2020

EUR/CHF: SNB does not find love in prices – Rabobank

FXStreet reports that economists at Rabobank note that the Swiss National Bank (SNB) has the mandate to maintain CPI inflation near 2% on a yearly basis but is currently running at just 0.2%. CHF's strength is not welcomed by SNB, economists said.

"The strong performance of the CHF can be associated with Switzerland's robust fundamentals which ensure that the currency is considered by many investors to be store of value. While there have been a wide number of exogenous factors which have sparked flows into safe-haven currencies such as the CHF or the JPY over the years, the CHF is particularly sensitive to bad news stemming from the Eurozone."

"Even if coronavirus fears lessen, the recent worsening in Eurozone economic data threatens to keep the CHF stronger for longer. The SNB is mandated to ensure price stability which equates with a rise in CPI inflation of less than 2% y/y. Swiss headline CPI inflation is currently running at just 0.2% y/y and has not been above the 2.0% level since a temporary spike in 2008."

"In view of the SNB's long-standing difficulties in supporting inflation, sporadic inflows associated with safe-haven demand for the CHF are very unwelcome. Even so, it is our expectation that Eurozone growth will be sluggish this year implying that EUR/CHF is likely to continue to trade heavily. In addition, any surge in coronavirus fears are also likely to benefit the CHF given its safe-haven status."

"Having breached the 2017 low around 1.0624, technical indicators suggest that EUR/CHF could be headed towards 1.05. That said, momentum currently appears to be stretched which suggests there is scope for a period of consolidation around current levels. For now, we maintain our 3-month EUR/CHF forecast of 1.06."

Open Forex Demo Account
I understand and accept the Privacy Policy and agree that my name and contact details can be used by TeleTrade to contact me about the information I have selected.
37 International Awards
Have a question?

We are ready to assist you in every step of your trading experience
by providing 24/5 multilingual customer support.

Follow us

Risk Warning: Trading Forex and CFDs on margin carries a high level of risk and may not be suitable for all investors. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 73.55% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Prior to trading, you should take into consideration your level of experience and financial situation. TeleTrade strives to provide you with all the necessary information and protective measures, but, if the risks seem still unclear to you, please seek independent advice.

© 2011-2020 TeleTrade-DJ International Consulting Ltd

TeleTrade-DJ International Consulting Ltd is registered as a Cyprus Investment Firm (CIF) under registration number HE272810 and is licensed by the Cyprus Securities and Exchange Commission (CySEC) under license number 158/11.

The company operates in accordance with Markets in Financial Instruments Directive (MiFID).

The content on this website is for information purposes only. All the services and information provided have been obtained from sources deemed to be reliable. TeleTrade-DJ International Consulting Ltd ("TeleTrade") and/or any third-party information providers provide the services and information without warranty of any kind. By using this information and services you agree that under no circumstances shall TeleTrade have any liability to any person or entity for any loss or damage in whole or part caused by reliance on such information and services.

TeleTrade cooperates exclusively with regulated financial institutions for the safekeeping of clients' funds. Please see the entire list of banks and payment service providers entrusted with the handling of clients' funds.

Please read our full Terms of Use.

To maximise our visitors' browsing experience, TeleTrade uses cookies in our web services. By continuing to browse this site you agree to our use of cookies. You may change your cookie consent or view our cookie declaration here.

TeleTrade-DJ International Consulting Ltd currently provides its services on a cross-border basis, within EEA states (except Belgium) under the MiFID passporting regime, and in selected 3rd countries. TeleTrade does not provide its services to residents or nationals of the USA.

Material posted here is solely for information purposes and reliance on this may lead to losses. Past performances are not a reliable indicator of future results. Please read our full disclaimer.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 73.55% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.