Goldman Sachs discusses CHF outlook and maintains a bullish bias over the medium-term. ‘The SNB surprised markets with a 50bp hike last week and a change to its intervention framework. The move confirms our bullish view on the Franc and is the strongest evidence yet of our “Reverse Currency Wars” thesis-the era of targeting weaker exchange rates is over (and accelerating through the year) is probably too high relative to the SNB’s inflation aim. The Bank’s research and our own have found that a 1%appreciation in the currency can lower inflation by about 0.1-0.2%. Taken together, we think the Bank is likely to target about a 5% appreciation in the real exchange rate, which would put it around the post-2015 average,” G “With this in mind, we are rolling forward
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Goldman Sachs discusses CHF outlook and maintains a bullish bias over the medium-term.