Five things to watch in markets in the week ahead
Investing.com - Morgan Stanley has issued a new forecast for the EUR/CHF currency pair, projecting it to trade within a narrow range of 0.93-0.95 due to competing market forces.
The investment bank identifies two primary factors affecting the currency pair: EUR-CHF rate compression pushing the pair downward, while the Swiss franc’s low yield supports its usage as a funding currency, creating upward pressure.
For the USD/CHF pair, Morgan Stanley predicts a decline alongside a weaker U.S. dollar in the first half of 2026, though the analysis notes this depreciation will be partially offset by negative carry.
The forecast indicates the Swiss franc’s decline against the dollar will be more modest compared to the Japanese yen’s expected fall against the greenback during the same period.
Morgan Stanley’s analysis suggests the Swiss franc represents a relatively more attractive funding currency option compared to the Japanese yen, based on the projected currency movements against the U.S. dollar.
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