Analysts at Citigroup expect the single currency to fall to 1.17 versus Swiss franc even though they believe that CHF is overvalued against euro in the longer term.

The specialists are surprised by good performance of Switzerland’s economy taking into account the strength of its national currency. In their view, franc may be driven by the capital flight both from Middle East and North Africa and euro area’s periphery. In addition, it’s also necessary to remember about the continuing problem with CHF-denominated mortgages in Hungary.

As a result, Citi sees the high risk of EUR/CHF decline in the short term, especially in case of high risk aversion.


Chart. Daily USD/CHF