SEB: the franc will weaken over time
The recovery of risk appetite helped the Swiss National Bank to protect EUR/CHF at 1.05. However, EUR/CHF growth turned out to be short-lived, and in recent days Swiss franc has been demonstrating attempts to bounce back. SEB notes that in light of the signs of a new wave of COVID-19 disease, the Swiss currency continues to attract safe haven seekers, while a positive factor for it is also a constructive fundamental picture.
SEB, however, believes that the SNB has enough opportunities to protect the franc from excessive strengthening, and in the coming months investors will have more clarity about the economic recovery process. SEB believes that in these conditions EUR/CHF can be expected to grow to 1.09 and 1.10 in the third and fourth quarters, while next year the bank expects the pair to return to 1.14/1.15 amid improving global economic conditions.