© Bloomberg. The cross of the Swiss national flag sits on Fifty, twenty and ten Swiss franc banknotes in an arranged photograph in Bern, Switzerland, on Wednesday, June 12, 2019. With the franc having touched a two-year high against the euro, SNB President Thomas Jordan and fellow policy makers are feeling the pressure from risks such as trade tensions, a German industrial slump, Italian politics and Brexit. Photographer: Stefan Wermuth/Bloomberg
(Bloomberg) — The franc is only slightly overvalued versus the euro and should hit parity with the common currency in the longer term, according to Credit Suisse Group AG.
The haven franc has appreciated sharply since the onset of the financial crisis, depressing growth and inflation. The Swiss National Bank considers the franc “highly valued.” It’s using a deposit rate of minus 0.75% and a pledge to intervene in force to contain its rise.
Credit Suisse estimates the franc would be fairly valued at 1.24 per euro. That compares with Tuesday’s peak of 1.1174, spurred by investors bracing for more policy easing in the euro area.
“It’s not a question of if parity comes, but when,” said Claude Maurer, an economist at Credit Suisse, citing Switzerland’s low rate of inflation and high trade surplus.
Credit Suisse Sees Franc Eventually Hitting Parity With Euro
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