As the exchange rate between the Swiss franc and the euro stabilised around 1.07, the outlook for the Swiss economy recovered gradually from the shock of the SNB’s decision to abandon the fixed exchange rate.
As of March 2015, the ZEW-CS indicator on financial stability improved from to -37.9bp, compared to -73.0bsp the previous month.
Another factor contributing to the improvement of economic forecasts is the gradual recovery in the eurozone, with the six month outlook for the currency union improving to +62.8bsp as a result of the ECB’s QE measures and continuously low oil prices.
Respondents continue to be divided on the long term outlook for the exchange rates: A majority of 37.8% now expect the euro exchange rate to remain stable, while 35% anticipate further devalutation and 27% anticipate a gradual appreciation of the euro.
The ZEW March survey was conducted in collaboration with Credit Suisse among 37 Switzerland-based analysts.