EUR/CHF at Worst Level since March 2

Worst Level

              A second day of selling trend at forex triggered EUR/CHF exchange rate lower than last week and at the point worst since March 2.  This currency pair is considered the barometer of the European reopening trade. Lately it has struggled due to many countries suspending use of AstraZeneca vaccine and third wave of coronavirus spreading through Europe. Additionally, the prognosis of the eurozone recovering from the financial crisis are poor. There are fears of repeat of bad results from last year while many countries are under lockdown. In eurozone there isn’t observed fiscal capacity that could quickly set recovery of economy, as in USA. Problems with AstraZeneca should cease soon, as experts comment the risk is low. This shouldn’t pose a long-term threat to Euro exchange rate.

SEB’s Prognosis for EUR/CHF

              Swedish bank SEB has posted its prognosis for exchange rates for 2021. Majority of them are expected to get stronger, but there are exceptions. Euro versus USD should go up to 1,23 by the end of the year, with higher level in September – around 1,24. EUR/CHF, which now is close to 1,11, should stay at similar level at the end of 2021, as SEB predicts, to hit better prices next year. Still in March this year SEB sees 1,12 level of EUR/CHF.

Other Bank’s Forecasts

              Also, JP Morgan, Bank of America and TD Bank gave forecasts for forex market. According to them, exchange rate of USD versus CHF shall grow in coming months, but there is lot of skepticism when it comes to prices of Euro versus Swiss franc. The eurozone’s currency is expected to get weaker. Experts of JP Morgan recommend to investors not to wait for higher rates of EUR/CHF at this point as lack of influence of interest rates does not justify expectations of good dynamics here. As the exchange rate EUR/CHF hit the level predicted by JP Morgan as a target one for this year, specialists at this bank are very cautious when it comes to stating that there is room for growth in this pair. Only if monetary policy of the European Central Bank and Swiss Central Bank will become significantly different, there might be capacity of this exchange rate getting higher. TD Bank posted some expectations of USD/CHF, according to which US Dollar will get stronger versus Swiss franc, but the price will go modestly higher. By the and of 2021 USD/CHF should hit the point of 0,94, with next year dedicated to consolidation of this rate.