USD/CHF to reach parity (UBS)
According to UBS strategists, USD/CHF is doomed to reach the parity level over the coming weeks. The reasons are as follows:
First, demand for safe haven assets is waning as central banks keep loosening monetary policy to revive economic growth;
Last year’s ECB commitment to buy government bonds through Outright Monetary Transactions has cut the risk of the region’s bankruptcy;
SNB remains committed to capping the franc at 1.20 against the euro and warns it is ready to take further measures. In contrast, the Fed may become the first major central bank to start exiting unconventional monetary policy;
Franc suffers from the fears about Germany’s recovery stalling this year.