The market has pushed the euro to a new high against the franc since the Swiss Nation Bank (SNB) removed its currency peg with the euro at 1.2. The euro is currently trading at 1.155 as it cleared the previous high made back in June around 1.15 area.
We have been saying for quite some time now that franc remains one of the most overvalued currency in OECD and SNB is likely to be the last man standing, when it comes to raising rates and backing away from the stimulus. As the inflationary pressure rises across the world, leading to higher volatilities in both bond and currency market, the franc is being punished for SNB’s standing out.
With such outlook, we remain bullish on Euro/franc and we recommend a buy at the current price of 1.155 and at dips with a target around 1.18 area. Stop loss is recommended at 1.126 for the moment due to an expectation of increased volatility over FOMC, BoE, and ECB monetary policies.
