Danthine: EUR/CHF peg still needed
SNB Vice-Chairman Jean-Pierre Danthine told in an interview to a Swiss newspaper that the central bank would only consider scrapping the 1.20 EUR/CHF cap if inflation was much higher and if there was less upward pressure on the currency. He went further, saying there were no inflation risks over the next 3 years, meaning the minimum exchange rate remained the appropriate tool to guarantee price stability for the foreseeable future. Danthine's comments offer a long-term comfort to the CHF bears.
According to the late-January Bloomberg survey, 7of 20 economists predict that the 1.20 cap will be lifted in 2015 and another 7 see that happening in 2016. Only 3 forecast the ceiling being abandoned in 2014 and 3 expects a 2017 exit.