Rabobank - "Aside from the yen and sterling, the only other currency that has underperformed the USD so far this year has been the Swiss franc. The softer tone of the CHF, which has dropped over 2% vs. the EUR this year, is linked to the improved outlook for the future of EMU. While we do not subscribe to the view that the crisis in the Eurozone is over, it is certainly in a lull and the future of EMU certainly appears more assured than during much of 2012. Even with the SNB protecting its EUR/CHF1.200 ‘floor’, the CHF is hugely overvalued and a main factor for this is safe haven demand due to the crisis. It is natural then to expect EUR/CHF to rise as confidence in the cohesion of EMU builds. We expect that EUR/CHF will continue to creep higher towards the 1.2500 area medium-term on the anticipation that EMU is nearer to a finding a solution for the crisis. However, a re-emergence of tension in the Eurozone is still very possible and this could send EUR/CHF rapidly back towards 1.20. 2011 peaks for EUR/CHF lie near 1.2475."