Deutsche Bank - "Attempts to account for extraneous deposit inflows into (former) safe haven countries is one way to try measure the scope for outflows, but unreliable short-term capital flow data, and the difficulties separating safe haven flows from other portfolio decisions, complicates this assessment. A much simpler approach is to look at the price action, and the extent to which safe havens have lost their prior gains. A basket of JPY, CHF, NOK and GBP versus the EUR has retraced less than a third of their gains since the financial crisis apex, consistent with plenty of scope for reversal to come. Again sustained EUR gains are seen concentrated on the JPY and GBP in particular.
Some have suggested the CHF will play a more active 'funding' role. The CHF is a much less logical alternative funder for a few reasons. In a 'risk on' world, EUR/USD will likely be well supported, and because we expect EUR/USD's correlation to USD/CHF to reassert itself slowly as the Swissie positioning squeeze slowly wears thin, the USD makes a better funder than the CHF if EUR/USD is heading higher. If EUR/USD is heading lower, it may well be in a risk off environment, in which case CHF funding will be the last issue on traders' minds.
Given Switzerland's resolute external balance in the face of past exchange rate strength, the case for concerted EUR/CHF push much beyond 1.25 is weak, especially while their are longer-term EUR concerns. GBP makes a much stronger fundamental case for weakness as we have written about extensively in recent weeks. Outside the JPY and USD, the GBP is the logical funder among major currencies - which will add to EUR/GBP's push to 0.85 and we believe beyond to the high 0.80s."