CHF: Focus Remains On External Drivers Until Swiss CPI

EURCHF has printed lower lows for a fourth consecutive session as the corrective pullback off mid-August highs continues. Today’s US jobless claims data and Powell’s appearance at Jackson Hole on Friday (1000ET/1500BST) provide points of interest here - and more hawkish than expected outcomes could bring the prevailing trend of a weaker greenback / lower yields to a halt, which might yield some pushback on the recent CHF strength.

• CHF's status as a funding currency remains the key driver, underpinned by CHF's co-movement with the JPY during recent market turbulence. This leaves initial focus on external drivers - particularly as the Swiss calendar provides little input until the next CPI release on Sept 3rd, however we expect focus to shift to the Sept 26 SNB meeting thereafter, for which around 32bps of easing are priced.
• Levels to watch on EURCHF remain 0.9440, the 38.2% retracement for the upleg off 0.9211 - the multi-year low, and 0.9575, the August 15 high, around which the crossing of the 50/200DMAs supported the move lower afterwards.
• On SNB intervention risk, analyst views appear a bit mixed: Goldman Sachs have recently noted some potential intervention "curbing CHF strength during the market turbulence" of early August, while JP Morgan rather saw a "lack of major pushback from the SNB" re Franc strength. That being said, intervention risk at current levels of around 0.9481 appear limited.