We had previously forecast the Swiss franc to rise against the euro in the first half of the year as we thought the ECB would raise interest rates a bit less than the market anticipated and that there would be a global recession. These calls now look less certain so we think the franc will instead hold broadly steady against franc. But there are upside risks for the franc from SNB monetary policy decisions with SNB Chairman Thomas Jordan making it clear this week the importance of the franc as a tool to keep inflation low. Separately, we think that the Norges Bank will raise rates by 25bp in March to 3% and that there is a growing chance of further tightening beyond that.
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