SWITZERLAND: The Swiss franc is still trading below 1.10 against the single currency despite short-term bullish pressures on the pair. We believe that there is at the moment two major reasons that are pushing the euro against the Helvetic currency.
The French Presidential election and the start of the “Brexit” negotiations have removed – at least reducing the political and geopolitical uncertainties – so markets are clearly shifting towards risk-on and this is why we see the EURCHF pair moving up. In addition, Mario Draghi’s comments pushed the euro higher by stating the Eurozone recovery is progressing and the ECB monetary policy stance must accompany this recovery. Markets interpreted those declarations from the ECB as hawkish.