The EUR/CHF will start a new week on Monday with eyes centered ahead at the Swiss National Bank’s decision on Thursday.
The lack of major data ahead of the decision this week from the SNB will leave the room available for investors to weigh whether the SNB will actually move or delay it till 2012.
Clearly the Swiss economy is feeling the downside pressures on growth with contraction in the manufacturing sector and slowing exports while deflation threats and rising further and those remain the main argument for the SNB to step up the measures to weaken the franc.
We expect choppy trading on Monday with the market still assessing the impact of the decision made inBrusselsand whether the new fiscal pact along with the IMF loans and eased stance on private sector involvement on the PSI is sufficient to hold the euro especially with the first test on Monday with Italian and French bond auctions.
We are still bearish on the franc overall this week until the decision on Thursday that might either pressure further gains for the pair or open the room for some correction as overall the franc’s outlook is still weak.
Originally posted here
