UBS Forecasts EUR/CHF to Trade Between 0.91 and 0.93

Overview of EUR/CHF Forecast#

UBS Switzerland AG has projected that the EUR/CHF currency pair will trade within a range of 0.91 to 0.93 in the upcoming months. They believe that the 0.90 level will act as a strong support point for the pair.

Market Influences#

Recently, the EUR/CHF pair rebounded from an initial decline due to the US-Iran conflict, climbing back towards 0.92. This recovery was fueled by a renewed appetite for risk among investors, who are optimistic about a quick resolution to the conflict following recent ceasefires. UBS strategists Constantin Bolz and Clémence Dumoncel noted that this shift in sentiment has positively impacted the euro.

Central Bank Expectations#

The expectations surrounding the European Central Bank (ECB) are also playing a significant role in supporting the euro. With ECB President Christine Lagarde indicating potential risks of rising inflation, there is speculation that the bank may consider raising interest rates if oil prices remain high. In contrast, the Swiss National Bank (SNB) is anticipated to maintain its current stance, which further supports the euro against the Swiss franc.

Future Scenarios#

UBS believes that the EUR/CHF pair will likely remain stable and is not expected to drop below the 0.90 level in the near future. They identify resistance levels at approximately 0.9275 and 0.935. The only scenario that could push the pair towards or below 0.90 would be a significant downturn in equity markets or increased recession risks. Additionally, a resolution to ongoing conflicts, such as those involving the US and Iran or Ukraine and Russia, could create upside potential for the euro.