UBS Forecasts EUR/CHF to Trade in 0.91-0.93 Range

UBS Projects Stable Range for EUR/CHF

UBS Switzerland AG projects the EUR/CHF currency pair will remain stable within a 0.91 to 0.93 range in the upcoming months. The bank's strategists identify the 0.90 level as a strong support floor for the pair.

Market Overview and Key Drivers

The pair's recent recovery towards 0.92 is attributed to renewed risk appetite following de-escalation in the US-Iran conflict. Furthermore, market expectations of a hawkish European Central Bank, potentially raising rates due to inflation risks, support the euro. In contrast, the Swiss National Bank is anticipated to maintain its current policy stance.

Economic and Market Impact

Analysts Constantin Bolz and Clémence Dumoncel note that a widening yield differential between the ECB and SNB would favor the EUR/CHF pair, particularly if oil prices stay elevated. The report identifies key upside resistance levels around 0.9275 and 0.935.

Summary and Outlook

UBS foresees the EUR/CHF pair staying supported under most scenarios. A significant downturn below the 0.90 mark is considered unlikely unless a highly adverse event occurs, such as a major equity sell-off or rising global recession risks.

FAQ

Q: What is the expected trading range for EUR/CHF according to UBS?
A: UBS expects the EUR/CHF pair to trade between 0.91 and 0.93 in the near term.

Q: What could push EUR/CHF below 0.90?
A: A move below 0.90 would likely require a highly adverse scenario, such as a major equity market sell-off and increased recession fears.

Source: Investing.com