FXStreet (Barcelona) – Julien Manceaux, Economist at ING, expects EUR/CHF to head towards parity by 2015-end, and doesn’t expect any further SNB action in the short-term in lieu of the Greece crisis.
Key Quotes
“We continue to expect a short technical recession in Switzerland in the first semester of this year, reducing 2015 GDP growth to 0.6%. This mild growth outlook should be no cause for a strong monetary policy change.”
“We expect the SNB to continue to intervene to support the CHF above parity against the euro in 2015 and to ensure that interest rates spread between the euro and CHF areas remain substantial.”
“After the first shock on the Swiss economy will be behind it, the SNB will be increasingly tolerant with higher values of the CHF against the EUR. This is why we believe that the EUR/CHF will come closer to parity before reaching it at the end of the year.”
“That said, it will remain too soon in coming months to talk about any normalization of the SNB’s interest rate target. In the very short run, safe haven purchases are increasing again in the wake of the Greek crisis, putting further pressure on the CHF and on EUR-CHF interest rates spread. However, as we still believe that a solution will be found to the Greek crisis, we do not anticipate new short term actions from the SNB.”
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