08:20 AM EDT, 08/27/2024 (MT Newswires) -- UBS said it expects the Swiss central bank (SNB) to cut rates one last time in September, bringing the SNB's easing cycle to an end while other central banks keep on easing.

The bank predicted the European Central Bank (ECB) to gradually lower its interest rate by at least another 50bps this year, reducing the rate differential between the eurozone and Switzerland, as such supporting the Swiss franc (CHF).

Growth has been stalling on the continent and ongoing fiscal consolidation is likely going to somewhat dampen the positive

impulse of lower rates, stated UBS.

Summer has brought many surprises -- not least on the political side, wrote the bank in a note to clients. The prospect of further developments should keep uncertainty high, favoring the CHF over the euro (EUR).

While the EUR is supported by the fall in global yields, akin to other pro-growth currencies, UBS thinks that the limited excitement in the eurozone from growth and a geopolitical perspective will keep the Swiss franc attractive enough to push the EURCHF slightly lower in the coming months.