Surging virus cases cast a shadow over Switzerland

The appreciation of the Swiss franc to a three-month high against the euro this week opens the door to renewed FX interventions by the SNB. However, if appetite for risk improves next year, as we expect, the franc should ease back and give the Bank some breathing space. Next week, the Riksbank’s latest Business Survey will probably show that firms were feeling pretty upbeat in late summer, but the surveys would have been conducted before the renewed surge in virus cases in Europe so the results should be treated with a pinch of salt.