EUR/CHF Uptrend May be Limited by Strong Swiss Growth

Rabobank's Senior FX Strategist Jane Foley says strong Swiss growth may curb losses for the EUR/CHF exchange rate. The Swiss economy is showing resilience, with a stronger-than-expected Q2 Gross Domestic Product (GDP) release.

Foley notes that despite the positive economic data, the EUR/CHF remains in a gentle uptrend since late May and has even exceeded their expectations for moderate growth. However, she believes that strong Swiss growth could limit upside potential and increase sideways trading.

The Swiss National Bank (SNB) must be satisfied with the softening value of the CHF in recent months, as it has struggled with safe haven flows into the currency. Foley suggests that intervention threats and zero policy rates have diluted the appeal of the CHF as a safe haven currency.