CHF: Praying for a last minute deal - ING

Switzerland is very much preoccupied with the 39% US tariffs due to come into force later this week. The Swiss government is already discussing short-time worker compensation in the event of layoffs - clearly preparing for the worst, ING's FX analyst Chris Turner notes.

EUR/CHF may be headed back to the 0.9450 area

"Having been offered for large parts of the year, EUR/CHF is now starting to turn higher. What if the US closed its doors to Swiss exports and Swiss FX earnings fell markedly? We can see why the Swiss franc is softening up, and the uncertainty makes a stronger case for the Swiss National Bank to take rates into negative territory later this year."

"Yet we suspect we haven't heard the last word on this deal and would not be surprised if some pharma-related deal (lower drug prices in the US?) or Swiss commitments to purchase relatively expensive US energy result in a lower tariff rate eventually."

"Until that deal is cut, however, EUR/CHF could be headed back to the 0.9450 area."