Euro to Swiss Franc (EUR/CHF) Exchange Rate Forecast: SNB to Reveal EUR/CHF Peg Removal Fallout, Franc Edging Towards Parity
The Euro to Swiss Franc (EUR/CHF) exchange rate recorded gains in Wednesday’s European session after Swiss Retail Sales figures and the nation’s Producer Price Index (PPI) fell lower than forecast.
If you're looking to make an international money transfer, we recommend TorFX.
Swiss Retail Sales took a tumble in January, softening from a negatively revised +1.9% to -0.3% on the year. Meanwhile, Producer and Import Prices softened further from -2.7% to -3.6% in February.
This week will see the Swiss National Bank (SNB) unveil the amount of damage the nation took from the removal of the Euro to Swiss Franc (EUR/CHF) exchange rate cap in January.
EUR/CHF Exchange Rate Forecast to Fluctuate on SNB Forecasts
Economist Martin Gueth commented: ‘The strong appreciation of the Franc after the cap was given up should significantly hit the Swiss economy. We expect the SNB to remain in a wait-and-see mode, but should the Franc appreciate, it will wage fresh currency interventions or even cut rates again.’
The SNB will announce its economic forecasts for the near future on the 19th March and the EUR/CHF currency pair is expected to fluctuate dependent on the impact of the shock. SNB President Thomas Jordan will be in the spotlight this week as the central bank unveils forecasts after recently cutting interest rates to -0.75%.
Moody’s Analytics representative Bernard Yaros commented: ‘The Franc’s value will be the most important consideration taken by the SNB, regarding its policy vis-a-vis the deposit rate. If the Franc appreciated above current levels, getting dangerously close to parity with the Euro or even breaking it, that would trigger a further cut to the deposit rate this year.’
Meanwhile, the Euro could experience movement later in Monday’s European session with the release of the European Central Bank’s (ECB) quantitative easing (QE) purchase update. The central bank began QE last week after months of struggling to restore growth in the 19-nation currency bloc.
However, the ongoing situation with Greece could threaten to pressure the Euro lower if a favourable decision can’t be reached. In recent weeks, tensions between Greece and Germany have heightened and much of the spotlight has been on back and forth conflict between the two nations.
Euro to Swiss Franc (EUR/CHF) Exchange Rate Forecast
The Euro to Swiss Franc (EUR/CHF) exchange rate could experience massive movement on Tuesday when ZEW publishes its German and Eurozone Economic Sentiment Surveys, as well as Germany’s Current Situation Survey.
In addition, final Eurozone Consumer Price Index (CPI) stats will also emerge.
The Euro to Swiss Franc (EUR/CHF) exchange rate is trading at 1.0598. The Swiss Franc to Euro (EUR/CHF) exchange rate is trending in the region of 0.9444.