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SNB Review: Significantly overvalued CHF, dovish stance - Nomura

FXStreet (Delhi) – Research Team at Nomura, note that although the SNB acknowledged “a slight depreciation” of CHF, it said the currency was still significantly overvalued and maintained a dovish stance in its yesterday’s policy meet.

Key Quotes

“The SNB left its policy unchanged as widely expected. The Bank lowered its near-term
inflation forecast as we expected, but the slightly higher 2017 inflation forecast suggests
the Bank’s view on inflation remains largely unchanged.”

“The Bank’s policy stance remains dovish, even after the recent weakness in CHF. We do not expect the SNB to ease proactively in the near future, but the decision by the ECB whether to extend QE beyond September 2016 will likely affect its policy action and stance.”

“While CHF appreciated slightly after the decision, we expect it to start falling again. We expect EUR/CHF to rise to 1.11 by end-2015 and to 1.14 by end-2016, and we continue to recommend GBP/CHF long positions.

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