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16 Mar 2015
Further CHF weakness expected – Nomura
FXStreet (Barcelona) - FX Strategists at Nomura, argue that whatever the outcome of this week’s SNB meeting, the CHF will continue to weaken against the EUR and USD.
Key Quotes
“At the SNB meeting (19 March), the SNB could cut rates further to reduce the possibility of prolonged deflation in Switzerland, and we argue that it should, but then again it may just leave it for a future possibility. Of the two we think the latter is more likely and the SNB may disappoint us with a “wait and see” approach looking past the limited data we have had so far since the removal of the exchange rate floor (that exhibits further deflation concerns).”
“It has organised a press conference, in which we expect it to keep the door open to further policy options.”
“We continue to see further CHF weakness against EUR and USD, regardless of the SNB’s decision next week, even though the pace of weakness and short-term path of CHF will be affected by the decision.”
Key Quotes
“At the SNB meeting (19 March), the SNB could cut rates further to reduce the possibility of prolonged deflation in Switzerland, and we argue that it should, but then again it may just leave it for a future possibility. Of the two we think the latter is more likely and the SNB may disappoint us with a “wait and see” approach looking past the limited data we have had so far since the removal of the exchange rate floor (that exhibits further deflation concerns).”
“It has organised a press conference, in which we expect it to keep the door open to further policy options.”
“We continue to see further CHF weakness against EUR and USD, regardless of the SNB’s decision next week, even though the pace of weakness and short-term path of CHF will be affected by the decision.”