#EURCHF @ 1.00363 could extend its advance back to levels between 1.02 and 1.04 – MUFG

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EUR/CHF climbs back above parity. Economists at MUFG Bank believe that the pair could climb as high as 1.04.

“The SNB has confirmed that it has been intervening to support the Franc recently to prevent a sharper move lower from reinforcing upside inflation risks. Yesterday’s move higher could then encourage speculation that the SNB is becoming less concerned by upside inflation risks and more tolerant of a weaker CHF.”

“The favourable growth developments should encourage the ECB to keep tightening policy at a faster pace at upcoming policy meetings when we expect the policy rate to reach 3.00% by the end of Q1. It leaves room for EUR/CHF to extend its advance back to levels recorded in the 1H of last year when it was trading between 1.0200 and 1.0400.”

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