Market Outlook: EUR/CHF May Drop towards 0.92

Forex - ING analyst Chris Turner stated that the Swiss Franc could strengthen due to the Swiss National Bank's limited scope to lower interest rates. Turner noted that the market is pricing in a significant risk of a 50 basis point rate cut on Thursday; however, considering interest rates are already at 1.0%, he believes a 25 basis point cut is "much more likely." He explained, "While the market pricing is toying with the idea of negative rates next year, the SNB is unlikely to pull rates below 0.50% in this cycle." Turner emphasized that EUR/CHF could currently fall from 0.9299 to around 0.92000 as the understanding grows that the SNB will not be able to keep pace with the European Central Bank's policy easing.