SNB PREVIEW: A RATE CUT WOULD FURTHER UNDERMINE THE OUTLOOK FOR THE CHF – RABOBANK

Last year, the Swiss Franc (CHF) was the best performing G10 currency. Its fortunes have turned this year. Economists at Rabobank analyze CHF outlook ahead of the SNB meeting on Thursday.

SNB would welcome a softer CHF

A rate cut this week would further undermine the outlook for the CHF, particularly given the ‘higher for longer theme’ associated with the Fed.

In view of the decades of disinflationary/deflationary pressures suffered by Switzerland and an overvalued exchange rate, we expect that the SNB would welcome a softer CHF.