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The Euro to Franc exchange rate is set for a bounce through the coming European Central Bank decision and could eventually move back above parity.

This is according to a new strategy note from Société Générale, where analysts say mounting expectations of earlier ECB rate cuts are pressuring the EUR/CHF to 0.94.

This is the lowest level since 2015 and a major support, according to Soc Gen.

"However, our rates strategists think that Thursday’s ECB meeting will fall short of giving markets an excuse to consolidate views on the timing and extent of cuts, likely triggering a knee-jerk bounce in EUR/CHF," says Olivier Korber, a strategist at Soc Gen.

Analysts at the French banking giant say the Euro-Franc's fall below parity happened with the contraction in Swiss banks' deposits.

The deposit drawdown is used to boost the value of the Franc, thereby insulating the economy from imported inflationary pressures.

But, Soc Gen notes deposits have stabilised since September, a couple of months after the Switzerland CPI fell below 2%.

Above: EURCHF is approaching a major multi-year support line. Track CHF with your own custom rate alerts. Set Up Here.

"If deposits and liquidity were to stop contracting, the franc would lose a major bullish driver. Assuming, as we expect, that the EUR/USD grinds beyond 1.15 next year, EUR/CHF should return above parity," says Korber.

Société Générale says the strong franc has done a great deal to lessen the impact of imported inflation, since the Swiss CPI has now been printing below 2% since June.

"From here on, the SNB should thus be much more tolerant of the prospect of a weaker currency, which would improve both the valuation of the country’s massive FX reserves portfolio, and Switzerland’s competitiveness," says Korber.