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Anzo Lim

EUR/CHF: Opportunity for Starting Medium-term Long Position Has Come

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EUR/CHF continued to drop in the last week, with the exchange rate hitting the lowest point since mid-April, 2018. But now may not be a perfect time to sell EUR/CHF. As we expect the Swiss franc to decline in the future, the current situation is a good opportunity for establishing long positions on the long run.


Investors are not advised to chase the CHF higher, particularly if they think Swiss National Bank(SNB) has used up their monetary policy ammunition. As the widening gap between ECB and SNB policy failed to stabilize the EUR/CHF cross, it may be too early to expect less prudence in SNB, particularly since exchange rate will remain a crucial driver of SNBs policy decisions. The use of euro for funding carry may have complicated the cross's typical pattern by lowering the franc's sensitivity to improving global risk sentiment


Its estimated that the situation will change in the following quarters.

The SNB will take all measures necessary to keep the interest rate down, and will do so longer than ECB and other central banks. EUR/CHFs target at the end of the year is estimated to be at 1.1500, so now may be a good opportunity to open long position on the long run.

Edited by Anzo Lim

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