UBS lowers EUR/CHF target to 0.96 amid expected ECB rate cuts
2024.05.29 10:49
UBS revised its forecast for the currency pair, indicating a bearish outlook in the short term. The financial services firm adjusted its March 2022 target for the Euro to Swiss Franc exchange rate to 0.96, down from the previous 0.97. Additionally, UBS introduced a new forecast for June 2025, setting the target at 0.96.
The recent months have seen the EUR/CHF pair experience a rapid rise, driven by unexpectedly positive economic data from the Eurozone and a trend of carry-trade transactions that resulted in the selling of Swiss Francs. This uptick in the currency pair’s value has been notable, but UBS anticipates that this trend is nearing its peak.
UBS’s outlook suggests that the peak in the EUR/CHF exchange rate may be prompted by the anticipated initiation of interest rate cuts by the European Central Bank (ECB). The firm expects these policy changes to influence the currency pair’s trajectory in the near future.
The current position of the EUR/CHF exchange rate is perceived as unstable by UBS, especially considering the substantial volume of short positions on the Swiss Franc. This assessment implies a cautious stance on the currency pair, as the market anticipates policy shifts from the ECB that could affect the value of both the Euro and the Swiss Franc.
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