UBS on Tuesday flagged a buy opportunity in the EUR/CHF currency pair, setting a price objective of 0.945 from prevailing levels around 0.92 and advising a stop-loss at 0.91.
In a research note, the Swiss bank pointed to improving macroeconomic conditions across Europe as a primary rationale for the call. UBS said Germany's fiscal stimulus is gradually translating into firmer growth, a trend visible in stronger Purchasing Managers' Index readings and a higher ifo Business Climate Index, which the strategists cited as evidence supporting a stronger euro versus the franc.
The strategists argued that the global growth environment has become more procyclical and is recovering after recent tariff shocks. They said this shift should reduce the scale of safe-haven flows into the Swiss franc despite the persistence of geopolitical disruptions.
On monetary policy, UBS noted that the European Central Bank is likely to remain comfortable keeping interest rates on hold in light of the regional improvements the bank has observed. The combination of firmer European activity and a stable ECB stance underpins UBS's view that EUR/CHF can move higher.
UBS strategists Constantin Bolz and Clémence Dumoncel stressed that EUR/CHF has tested the 0.92 area on two prior occasions before rebounding, and they expect a comparable recovery in the coming weeks. The pair has spent time in the low 0.92 area multiple times over the past 1.5 years, with rapid rebounds each time, the note said.
Looking further out, the bank identified the prospect of a ceasefire in Ukraine as an additional factor that could support a stronger euro versus the franc. UBS stated that such an outcome has become more likely toward the end of 2025, which would be supportive for EUR/CHF if it materializes.
Finally, UBS highlighted recent communications from the Swiss National Bank reiterating its support for the current policy stance and signalling a bias against a persistently stronger Swiss franc. That posture from the SNB was presented as another element that could limit franc appreciation and help propel EUR/CHF toward UBS's 0.945 target.