EUR/CHF: Sustained move lower on the back of fundamentals, continued tight financial conditions

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EUR/CHF: Sustained move lower on the back of fundamentals, continued tight financial conditions
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EUR/CHF has moved sharply lower following the outbreak of war in the Middle East between Israel and Hamas. Economists at Danske Bank analyze the pair’

s outlook. Upside potential if the SNB decides to stop intervening We expect FX intervention to continue to limit imported inflation and thus keep a cap on EUR/CHF in the near term.

We forecast a sustained move lower in EUR/CHF on the back of fundamentals and continued tight financial conditions. In light of the lower spot, we lower our entire forecast profile. We target the cross at 0.93 in 6-12M. If the SNB decides to fully stop intervening, we see upside potential to EUR/CHF in the near term.

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