Bank of America Merrill Lynch FX Strategy Research makes the case for buying USD/CHF as the best directional trade for 2018.
"Our G10 FX directional trade of the year is higher USD/CHF. The balance of payments and continued policy divergence between the Fed and SNB will likely drive the trade.
Foreign investors have continued to sell Swiss domestic equities for much of the post-EUR/CHF peg era...We believe that the safe haven bid to CHF is evaporating. The CHF is essentially reverting to its traditional role as a low beta funding trade as political concerns in the Euro Area have faded.
Despite its recent language tweak, we believe that the SNB is nowhere close to declaring victory and would like to see EUR/CHF trading above the prior 1.20 floor," BofAML argues.
In line with this view, BofAML recommends buying a 6-month (17-May-18) USD/CHF 1.05 call, using spot reference 0.9925.