ING strategist Chris Turner says the Swiss franc has recently strengthened
versus the euro but further gains are likely limited because market expectations
for ECB tightening are unlikely to be pared back materially. The franc's move
was mainly driven by concerns over French sovereign debt that cut market
expectations for ECB tightening. "It is unclear whether short-term euro rates
need to fall further materially, unless energy prices decline significantly,"
Turner wrote. Euro-area inflation remains elevated, he added, giving the ECB
scope to tighten policy further.
