Swiss Franc Weakness Likely to Slow Near 0.95 Against Euro

Commerzbank's Michael Pfister points out that the Swiss Franc has weakened significantly since July, with EUR/CHF rising from around 0.92 to occasionally approach 0.95. The main reason for this is the increase in oil prices and growing expectations of European Central Bank (ECB) tightening.

The market, however, does not expect a similar degree of tightening from the Swiss National Bank (SNB), leading to an increased difference in monetary policy tightening by the end of December.

Pfister suggests that this discrepancy may lead to a slowdown in EUR/CHF gains around 0.95, as expectations between the euro area and Switzerland cannot diverge much further.