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Goldman Sachs: Playing A Different Game

CHF

Late on Friday Goldman Sachs wrote “by most standards, the SNB has been uniquely successful in fighting inflation. There have now been three downside surprises in a row on both headline and core CPI.”

  • “However, the SNB has the strictest inflation mandate of any G10 central bank.”
  • “And so, despite this better data (which was lower than the latest SNB forecasts), President Jordan struck a concerned tone by saying that inflation is more persistent than the SNB expected and that low rates meant there was no need to wait before hiking further.”
  • “As a result, we think it is probably too soon for the SNB to materially step back from monetary policy tightening and FX intervention.”
  • “However, given the recent headline inflation relief, especially in Europe, we now expect somewhat less nominal exchange rate appreciation than previously.”
  • “Putting the near-term hawkish narrative together with headline inflation relief abroad, we revise our EUR/CHF forecast to CHF0.95, CHF0.94, CHF0.93 in 3, 6 and 12 months (vs. CHF0.96, CHF0.94, CHF0.92 previously).
MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com

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