CHF: SNB interest rates can turn negative again later this year - Rabobank

The next SNB policy meeting is not scheduled until March 20, Rabobank's FX analyst Jane Foley notes.

EUR/USD to trade at 0.92 around the middle of the year

"A lot can happen in six weeks, but at this point it seems fairly likely that the central bank will announce another cut in rates. This would follow the jumbo 50 bps move at the last meeting in December. The SNB only meets once a quarter. This alone increases the chances of a move next month."

"Arguably, it also raises the chances that policymakers could decide on another jumbo move since the next policy meeting will not be until June. That said, the SNB's policy rate is already at 0.50%. Given the benign inflation backdrop in Switzerland and the lacklustre pace of growth there is the possibility that SNB interest rates turn negative again later this year."

"Despite the risk of more SNB rate cuts this year, we expect safe-haven demand to continue to function as a prop for the CHF and see scope for further flurries down to the EUR/USD 0.92 level around the middle of the year."