14 May 2014
What about EUR/CHF, if ECB cuts rates - UBS
FXStreet (Córdoba) - The UBS analyst team thinks that an ECB rate cut would necessarily lead to the SNB to reinforce the EUR/CHF floor.
Key Quotes
"We think the SNB will strictly reinforce the EUR/CHF-floor, if the ECB cuts rates".
"The SNB would try to avoid implementing negative rates. They might have to undertake some interventions, if the market tries to test the conviction and drives EUR/CHF towards the floor".
"Currently we think that might not even be necessary, as market expectations about the floor are solid. Forward rates stay up to three years above the critical 1.20 level".
"We keep our forecast unchanged for a 1.21-1.25 range trading".
Key Quotes
"We think the SNB will strictly reinforce the EUR/CHF-floor, if the ECB cuts rates".
"The SNB would try to avoid implementing negative rates. They might have to undertake some interventions, if the market tries to test the conviction and drives EUR/CHF towards the floor".
"Currently we think that might not even be necessary, as market expectations about the floor are solid. Forward rates stay up to three years above the critical 1.20 level".
"We keep our forecast unchanged for a 1.21-1.25 range trading".