Switzerland faces the deflation risk and the currency's appreciation could aggravate that risk. So the SNB will deploy all possible measures in 2015 to contain the CHF's rise. Since possible ECB steps could exert more upside pressure on the CHF, the SNB will try to outweigh such spill over effects by engaging in large scale FX intervention. We expect EUR/CHF to hit 1.22 by the end of this year. USD/CHF on the other hand is likely to move above the parity in 2015.
The material has been provided by InstaForex Company – www.instaforex.com