22.08.201901:44 Forex Analysis & Reviews: The Swiss franc is stable, but it is recommended to hedge

According to analysts at the leading bank, Wells Fargo, the Swiss currency expects a gradual weakening against the European one. At the same time, experts do not exclude a slight rise of the franc against the US dollar. Thus, they recommend hedging the risks associated with the Swiss currency.

As observed by Nick Bennenbroek, head of foreign exchange at Wells Fargo, the Swiss National Bank could begin to gradually weaken the national currency. At the moment, the regulator has stepped up measures aimed at curbing the growth of the Swiss franc. In this situation, investors who may suffer losses from changes in the franc / euro exchange rate should be hedged, warn Wells Fargo.

Many market participants believe that the Central Bank of Switzerland is ready to lower interest rates. It is possible that this will happen next month, since traders are already laying such a step in prices. If the upward pressure on the franc continues, then on September 19, 2019, the National Bank of Switzerland will reduce rates, Wells Fargo is confident.

Currently, the EUR / CHF pair is trading in the range of $ 1.08707– $ 1.08787. On the other hand, the USD / CHF pair is trading at $ 0.9771 and continues to move within the correction and the downward channel. An additional signal in favor of the fall of the USD / CHF pair may be a rebound from the resistance area, experts say. The forecast for this pair involves testing the resistance level near the $ 0.9785 mark. However, experts do not rule out the fall to the level of $ 0.9625. Wells Fargo believes that the Swiss currency will strengthen slightly against the US dollar relative to current levels, as well as against the euro, it will become weaker.