EUR/CHF still seen higher at 1.11 on a 12-month horizon – Danske Bank

In August, EUR/CHF was approaching 1.07, but lately the pair has moved higher and was briefly above 1.09. Although economists at Danske Bank have slightly downgraded their forecasts, they still expect to see EUR/CHF at 1.11 in 12 months. 

See: EUR/CHF to head back to the 1.09 mark on high eurozone CPI – ING

Lower US T-yields to lift EUR/CHF

“We have revised down our EUR/CHF forecasts profile slightly but overall we still see a case for the cross moving higher.”

“We still expect US 10-year Treasury yields will move lower over the coming year targeting 2.0% in 12M, which should lift EUR/CHF. We still forecast EUR/CHF will trade at 1.11 in 12M.”

“The key joker for the pair is if 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.”