SEB note the CHF is overvalued today...>

DOLLAR-SWISS: SEB note the CHF is overvalued today compared with most other

currencies, but particularly the SEK. The most important reason for its high

valuation is its defensive qualities - whenever there is political or economic

uncertainty the CHF tends to outperform most other currencies. In the long-term,

we believe the CHF will have to weaken more broadly. Levels around 8.00 in the

CHF/SEK, 1.20 in the EUR/CHF, and 1.05 in USD/CHF look like reasonable long-term

targets. However, for this scenario to materialise global trade tensions have to

ease and global growth has to recover. Then the CHF is likely to suffer from the

combination of its high valuations and low interest rates, which makes the CHF

the perfect funding  currency.