24 Feb 2015
Further downside risks for CHF as rate cuts by SNB likely in March - RBS
FXStreet (Barcelona) - Melinda Burgess of RBS, risks are skewed to the downside for CHF ahead of SNB’s March meeting as further rate cuts are likely.
Key Quotes
“The removal of the EUR/CHF floor last month has raised the risks around slower growth and lower inflation in Switzerland’s export-oriented economy.”
“On a trade weighted basis, CHF continues to trade close to record highs but Switzerland’s large trade surplus argues against overvaluation, in our view.”
“Still, risks that the economy may even contract in H1:15 suggest that SNB will remain watchful of the CHF’s level.”
“The KOF leading indicator (Friday) and the manufacturing PMI (2 March) will be important.”
“EUR/CHF upside may be limited given Greek concerns, but risks looks skewed to further CHF downside on the crosses ahead of the March 19 SNB meeting where further rate cuts look likely.”
Key Quotes
“The removal of the EUR/CHF floor last month has raised the risks around slower growth and lower inflation in Switzerland’s export-oriented economy.”
“On a trade weighted basis, CHF continues to trade close to record highs but Switzerland’s large trade surplus argues against overvaluation, in our view.”
“Still, risks that the economy may even contract in H1:15 suggest that SNB will remain watchful of the CHF’s level.”
“The KOF leading indicator (Friday) and the manufacturing PMI (2 March) will be important.”
“EUR/CHF upside may be limited given Greek concerns, but risks looks skewed to further CHF downside on the crosses ahead of the March 19 SNB meeting where further rate cuts look likely.”