Deutsche Bank recommends buying the euro against the franc

According to currency strategists, Deutsche Bank, investors should buy the euro against the Swiss franc, as the basic interest rate in Switzerland will stay low for longer than in the euro area. Bank analysts note that recent comments by officials from the Swiss National Bank confirms the view that the Swiss central bank one of the last transgresses to tighten monetary policy. Since August 25, board member of the Swiss National Bank, Thomas Jordan said the central bank will continue to take measures against the national currency, noting that now is not the time to depart from the expansionary monetary policy. Swiss monetary authorities sold the franc and reduced interest rates on March 12 in order to halt the strengthening of the national currency in a time of deepening economic recession. At Deutsche Bank also noted that, based on measurements of spread between inflation-adjusted interest rates and gross domestic product, national monetary policy remains restrictive, despite the authorities' commitment to maintain rates at low levels. Given the 3-month real interest rates, now the spread is about 2.85% - the highest or most restrictive level of the second quarter of 1994. In view of the foregoing, the bank prefer to buy the euro against the Swiss franc. As the target of a pair of euro / franc bank raise the level of 1.5665 with a stop loss at 1.4925. Euro / franc is now trading at 1.5155.