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    EUR/CHF: Limited near-term, to rise later during the year - Lloyds Matías Salord

    According to analysts from Lloyds Bank there are downside risks to the EUR/CHF pair but they consider that during the second half of the year, CHF depreciation could send the pair toward 1.13Key Quotes:“Since late May, the Swiss franc has appreciated by over 2% against the euro, pushing EUR/CHF down from above 1.11 to around 1.085. Near term, elevated political uncertainty across the EU is likely to increase demand for safe-haven assets, presenting further upside risks to the Swiss franc. This could push EUR/CHF lower still, and possibly down to a fresh year-to-date low.”“The recent appreciation of the currency adds to already growing concerns over the strength of the CHF, with SNB officials continuing to reiterate that the CHF remains overvalued.With the deposit rate already at -0.75%, however, we suspect that the SNB will refrain from lowering interest rates further as a method of reducing the currency’s attractiveness. Instead, it is likely to favour direct currency intervention.“In the second half of the year, some fading in political uncertainty and a rise in global interest rates should lead to a gradual depreciation of the CHF and we forecast EUR/CHF to end 2016 at 1.13.” 


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