The  Department of Analysis of Bankinter  points out in its  Strategy Report Second Quarter 2018  its  forecast Swiss franc euro for 2018 and 2019.

Swiss franc euro forecast 2018 and 2019

The depreciation of the franc against the euro – from 1.15 to 1.17 – following the recent decision of the Swiss National Bank (SNB) to keep its monetary policy unchanged,  supports the SNB’s strategy and our vision on a relatively weak franc 2018 and 2019 whose trading range estimate to 1.15 / 1.20 .

Analysis Swiss franc euro

The SNB works to keep the franc weak and is getting

The SNB works to keep the franc weak and is getting. The increase in market volatility and the search for safe haven assets hamper the achievement of their objectives but only momentáneamente.- 

The uptick in  market volatility , the  fear of the rise of protectionism  and  geopolitical risk  have temporarily interrupted the depreciation that it had initiated the franc since early this year. Seeking refuge assets by investors, the current account surplus expected in Switzerland – around 10.0% in 2018 – and low inflation (+ 0.6% in February) explain the increase in demand for francs in times of uncertainty.

The SNB is convinced of the need to maintain a weak franc,  maintaining an expansionary monetary policy and commitment to intervene in the currency market. It is recalled that the franc is trading around 30.0% above the lows reached in 2007 when the Swiss economy grew at a rate of 3.0% .

We think that  interest rates in Switzerland – negative in virtually all segments of the curve – discourage investment in Swiss francs under normal circumstances . The depreciation of the franc against the Euro – from 1.15 to 1.17 – after the recent decision by the SNB to keep its monetary policy unchanged SNB supports the strategy and our vision of a relatively weak franc in 2018 and 2019 whose range quote we estimate at 1.15 / 1.20.

We think the SNB will maintain a strategy to weaken the franc monetary policy  to boost further the external sector and productivity of Swiss companies.  It is true that the maneuverability of the SNB in the forex market is limited – the volume of foreign reserves reached maximum historical – but  do not consider a change in the benchmark interest rate in Switzerland before the European Central Bank changes course Monetary Policy Does 2019 ?.