The value of the Swiss Franc (CHF) has dropped 1.2% after the SNB’s ‘surprise’ rate cut. Economists at Rabobank analyze CHF outlook.

EUR/CHF six-month forecast of 0.9800 brought forward to a three-month view

The SNB’s decision to cut rates this month will likely further the probability that the CHF could be used as a funding currency particularly if the SNB signals that it is prepared to match ECB rate cuts this year.

While there are several fronts from which demand for safe-haven could re-appear over the medium term and we do expect that volatility will rise towards the end of the year with the US election. That said, for now the CHF is likely to remain soft. 

We have brought forward our previous EUR/CHF six-month forecast of 0.9800 to a three-month view.