CHF: Swiss franc stays surprisingly bid – ING

One might have expected EUR/CHF to trade a little higher on this tariff ruling and the decent rally in equity markets, ING's FX analyst Chris Turner notes.

SNB constraints weigh on EUR/CHF despite risk-on mood

"The fact that it is still trading below 0.94 probably owes to creeping distrust of US Treasuries and the view that the Swiss National Bank is in a bit of a bind when it comes to interest rates and FX intervention."

"Looking at the SNB, it is reluctant to take the policy rate negative again, but it looks like it will have to when it next meets on 19 June. Currently, the market is split between a 25bp and 50bp rate cut."

"Equally, investors are of the view that the SNB will be more constrained with FX buying intervention – an activity very much at odds with the directives coming from Washington. The big doubt now is that the SNB can be dovish enough in June to take pressure off the EUR/CHF downside, especially if the ECB is to cut twice more."