EUR/CHF: More hawkish Fed to lift the pair towards 1.11 – Danske Bank

EUR/CHF has continued to move lower now trading below 1.08. Economists at Danske Bank have downgraded their one-month forecast but still expect the pair to grind higher as US yields lift off.

Key joker for EUR/CHF is a possible talking about ECB rate hikes

“We have revised our short-term EUR/CHF forecasts slightly lower to 1.08 in 1M (from 1.09).”

“We keep the rest of the forecast unchanged as we still see a case for higher US real rates, in step with the Fed turning more hawkish, which should lift EUR/CHF.”

“We forecast EUR/CHF will trade at 1.11 in 12M.”

“ The key joker for the pair is if the global macro becomes so good in Europe that markets start talking about ECB rate hikes. Today, such a scenario is not in play. A setback in risk sentiment is another joker.”

 

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