Credit Agricole CIB Research discusses CHF outlook and adopts a bullish bias in the medium-term. CACIB now targets EUR/CHF at 1.00 by end of Q3, and 0.98 by end of Q4.
"Last week, the SNB shocked the markets by raising rates 50bp and changing tack on the CHF. It no longer deems the currency as “highly valued”, while including the option to eventually sell some FX if the CHF is to weaken.
The CHF has subsequently outperformed all its G10 FX peers by a significant margin (around 2% at least). This looks more like a fundamental change than a flash in the pan for the CHF, as we abandon our bearish CHF call. As per our latest forecasts published last week, parity could become the new normal for the pair as our 2022e and 2023e EUR/CHF forecasts now stand at 1.00," CACIB adds.