This is according to an exchange rate forecast note issued by UniCredit. Also weighing on the pound to dollar rate is the expectation that the BoE to add another GBP 50bn of asset purchases (APP) in February. "The net result is that we now see cable falling through 1.50 and remaining below that threshold throughout 2H12, without rebounding back to 1.60 as per our previous forecast," say UniCredit. Indeed, both EURUSD and GBPUSD will continue to follow a similar trend and thus the net impact on EURGBP should be much smoother. Looking at the euro pound rate analysts say that they do see EURGBP below 0.80 in the coming quarters, but not too much below 0.78, its current fair value based on PPP. With regards to the Swiss Franc, the SNB's determination to defend the 1.20 floor for EURCHF is expected to continue independent of Hildebrand’s resignation, and the bank’s call for more franc weakness to come over time allows us to keep an upward bias at least for this EUR cross rate. "However, given the weaker EURUSD, the room for a EURCHF rebound will hardly exceed 1.28 this year. Hence, we see room for USDCHF to continue to rally to 1.10 in the coming quarters with respect to values still seen below parity in our previous scenario," say UniCredit.

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