EUR/CHF could quite easily revert to 0.9650 over the coming weeks – ING

EUR/CHF moved higher after Thursday's Swiss National Bank (SNB) press conference. Economists at ING analyze the pair’s outlook.

SNB no longer focusing on FX sales

Having sold almost exactly CHF100bn of FX since the third quarter of last year, the SNB effectively said that the policy of exclusively selling FX was over. This makes a lot of sense.

Take a look at the SNB's inflation forecasts out to the end of 2026 and you will see inflation at or mostly below 2% over the entire horizon. The SNB can argue that the inflation battle is won and it no longer has a priority of keeping the real CHf stable through nominal CHf appreciation and FX sales.

This looks to be quite a big deal and we think that merits a higher EUR/CHF from current levels. We could quite easily see EUR/CHF reverting to 0.9650 over the coming weeks.