EUR/CHF likely to gradually rise towards 1.20 by end-2018, says Lloyds Bank

The EUR/CHF currency pair had registered a post-currency-cap-removal high of 1.1625 on 22 September. This urged the Swiss National Bank to acknowledge that “significant overvaluation” of the Swiss franc has been reduced. But in recent comments, SNB Governor Jordan, made it clear that the currency continues to be strong, and does not see a reason to alter current policy, which is a combination of negative interest rates and occasional currency interventions.

Jordan also noted the variability, as seen during the recent North Korean and U.S. tensions that saw safe-haven flows drive CHF 2 percent higher. Geo-political tensions are expected to be a key driver and support for the CHF.

“We forecast EUR/CHF to gradually rise towards 1.20 at end-2018”, said Lloyds Bank.

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