Stay long EUR/CHF – Nomura

Analysts at Nomura suggest that with the global cycle in expansionary mode and the SNB likely to stay on hold for quite some time, CHF’s negative carry may become a more potent force against diminishing risk-aversion flows, which you can argue are acting in reverse.

Key Quotes

“We have already reached our recently upgraded year-end EUR/CHF forecast of 1.15 and by extension the market may start trading the pair along a trend basis and some further appreciation pressures may exist. We therefore expect a further market overshooting and hold onto our medium-term long EUR/CHF exposure, as we judge the risk-reward still lies in trading for a stronger EUR.”