EUR/CHF is testing the highs of the year

The euro is threatening a breakout. The pair is testing a pair of highs made in April and May. If it can get through them, it would be trading at the highest level in a year.

The market is reflecting a slowly-improving economy in Europe and the Swiss National Bank being at the leading edge of rate cuts.

More and more, the market is signalling a return to pre-pandemic norms around inflation and growth. That wasn’t exactly a blockbuster economic environment in Europe but low rates in the eurozone would mean even-lower rates in Switzerland and the carry trades that go along with it.

The pair was trading at 1.08 before the pandemic and that looks like a stretch but a rise above parity is certainly possible as the eurozone economy stabiliizes and money trickles out of Switzerland in an improving global economy.

This article was written by Adam Button at www.forexlive.com.