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- USD/CHF and EUR/CHF could bounce as status quo by the SNB would take the gloss off the Franc – SocGen
USD/CHF and EUR/CHF could bounce as status quo by the SNB would take the gloss off the Franc – SocGen
Franc inflection point? Economists at Société Générale note that USD/CHF and EUR/CHF could bounce higher.
SNB hiking cycle over?
The Swissie reversed course last week and surrendered some of the punchy gains of early July vs the USD as yield spreads widened in favour of the Dollar and single currency. Unlike in 2011, the Franc did not capitalise on the rating downgrade of the US from AAA to AA+ by Fitch.
On the data front, inflation in Switzerland surprised to the downside and raised doubts about whether the SNB tightening cycle is over. No further rate increase in September and ‘higher for longer’ policy outlooks at the Fed and ECB, even without further hikes, could precipitate a bounce in USD/CHF and EUR/CHF provided the sky does not fall on equities and credit.
Seasonality is mixed for EUR/CHF in August but is bullish for USD/CHF.
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