22 Oct 2013
Flash: EUR/CHF potential upside ahead – Danske Bank
FXstreet.com (Edinburgh) -Analyst Kasper Kirkegaard at Danske Bank commented the EUR/CHF now poses upside potential due to the better growth prospects in the euro bloc and a persistent current account surplus.
Key quotes
“Excess euro liquidity is approaching EUR200m as banks are repaying the three-year LTROs. This leaves upside risks on EUR/CHF via the upside risks on short-term euro money market rates”.
“We continue to expect the 1.20 minimum target to remain in place on the forecast horizon, although high credit growth and positive inflation prints could lead markets in 2014 to begin to speculate about a removal of the floor”.
“The eurozone current account surplus is improving fast and the combination of the ECB’s OMT programme and an exit from recession should help to attract capital”.
Key quotes
“Excess euro liquidity is approaching EUR200m as banks are repaying the three-year LTROs. This leaves upside risks on EUR/CHF via the upside risks on short-term euro money market rates”.
“We continue to expect the 1.20 minimum target to remain in place on the forecast horizon, although high credit growth and positive inflation prints could lead markets in 2014 to begin to speculate about a removal of the floor”.
“The eurozone current account surplus is improving fast and the combination of the ECB’s OMT programme and an exit from recession should help to attract capital”.