Investing.com – Political and monetary decisions are driving volatility in a variety of currencies, including the , and the Japanese yen. While the French elections weakened the euro and strengthened the Swiss franc, Japanese monetary policy negatively affects the yen. This is the opinion of Julius Baer, ​​who published a message to customers and the market on Tuesday.

According to the Swiss group, the weakening of the euro and the strengthening of the Swiss franc may have less impact “as the franc remains well balanced and the impact of the elections may be less significant than feared.” Despite the impact on the euro, David Meier, an economist at Julius Baer, ​​sees confined impact on the currency.

“The euro began to weaken earlier this month when the European Central Bank began easing policy. However, policy has deepened this weakness, and levels around 0.95 indicate that the franc is significantly overvalued again,” he explains, estimating EUR/CHF at 0.97.

As for the Japanese currency, the change in the Bank of Japan’s ultra-loose policy is expected to continue to weigh on the yen, says Julius Baer. “The Japanese yen continued to weaken after the July meeting of the Bank of Japan, which maintained its policy position unchanged, and further information on the gradual reduction of bond purchases was postponed to the next meeting,” he recalls, believing that the normalization of the BoJ monetary policy rate is very leisurely. Julius Baer estimates that there will be 160 of them in the forecast horizon of 3 to 12 months.

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