EUR/CHF down 15 pips to 1.0825 today
Credit Agricole CIB Research maintains recommending structural long EUR/CHF exposure through 2021 targeting 1.15.
"The advent of the EU recovery fund has bolstered European fiscal solidarity and thus considerably reduced the tail risks of EUR break -up. We think that the repricing of the sovereign risk premium will continue to boost the EUR in 2021. Indeed, we are expecting rebalancing flows into the EUR to intensify as the EU recovery fund bond issuance picks up next year," CACIB notes.
"All of the above should help the EUR/CHF cross recover further in the quarters to come , (1) due to an improving trade and risk asset -related capital flow situation to the benefit of the EUR; but also (2) because the SNB will stick to an unchanged monetary policy stance for longer , compared to the ECB. We expect the cross to reach levels closer to 1.1200 by the end of 2021. In the longer run , we see levels closer to 1.15 -1.16, in line with our trade recommendation's target," CACIB adds.
