The Swiss Franc (CHF)proved the major G10 outperformer in 2023. Economists at CIBC Capital Markets analyze EUR/CHF outlook for the coming months.
Graduated weakening in the CHF
The combination of disinflationary dynamics and an SNB that is increasingly mindful of a strong currency points towards a graduated weakening in the CHF.
Currently, the market anticipates more ECB activism into mid-year (-53 bps) than for the SNB (-42 bps). We would view both as likely to consider a more modest degree of policy easing.
Given the prospect of a more aggressive paring in ECB rate cut assumptions this points towards EUR/CHF heading towards the 200-Day Moving Average, modestly above 0.9600 into mid-2024.
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