USDCHF Forecast with Bank of America Merrill Lynch: 18 June SNB Monetary Policy Assessment and SNB Press Conference

Poor data for 1Q GDP and CPI have raised the possibility of a policy response from the Swiss National Bank at their 18 June meeting, notes Bank of America Merrill Lynch.

"While the element of surprise is a real one for the SNB, as was amply demonstrated at the tail end of 2014 and in January this year, we doubt they will act next week. Policy options are finite and dwindling, especially given the large size of the SNB balance sheet, so we believe the SNB will prefer a wait-and-see approach."

"Assuming a resolution in Greece, the loose SNB stance should allow CHF to gradually weaken in the medium term. We remain bearish CHF, particularly against USD, where monetary policy divergence should push the pair higher."