SNB Want The Euro To Swiss Franc Exchange Rate At 1.25

EUR/CHF was little moved on Thursday after the Swiss National Bank downgraded inflation forecasts and kept traders thinking there will simply be a slow and steady approach.

Risk conditions while less good than they have been, are not sufficiently poor to warrant much buying of the Franc and as a result, the US Dollar strength subdued the USD/CHF pairing.

Forex strategists at ING believe that the ultimate goal for the SNB is to get the Franc to 1.25, which at current levels suggests a lot more upside to come in the euro to Swiss franc exchange rate.

Key Quotes

“We very much doubt the SNB will be hiking more aggressively than the ECB and instead see the SNB potentially cutting its inflation forecast (ECB sees 1.7% Eurozone inflation in 2020) as a means to correct market pricing.

"Despite declines in the trade-weighted CHF, we still think the SNB want to see EUR/CHF back near 1.25 and could see EUR/CHF push close to 1.1800 today if the SNB is suitably dovish”