European political upheaval and the resulting loss for EUR/CHF this week make it more likely that Switzerland's central bank will cut its interest rate for a second time this month, according to Rabobank strategists.

EUR/CHF was last quoted on Tuesday at 0.9691, down 0.58% in the last five days and down 1.3% in the last month.

"We expect that the SNB would favor a softer profile for the CHF vs. the EUR and consequently see a strong risk of a June 20 rate cut," Rabobank strategists wrote in a Tuesday note to clients.

"Since it can be argued that the safe-haven CHF tends to perform well when the market is concerned about Eurozone fundamentals, the SNB may have an extra incentive to lower rates this month," they added.

Victories for 'populist' parties in Sunday's European Parliament election and the looming general election in France are likely to see a heightened market focus on euro area budget fundamentals up ahead, the Rabobank team said.

The election results risk seeing fiscal consolidation efforts fall by the wayside in European capitals, potentially stoking market concerns about debt sustainability, and already lifted the safe-have Swiss franc this week while weighing on EUR/CHF.

The Swiss National Bank is unlikely to welcome further losses in EUR/CHF, however, because of Switzerland's low inflation rates and the central bank's expectation that inflation will remain subdued near 1% through the years ahead.

"We expect that the SNB will be more worried about the disinflationary impact of a strong CHF than it is about the possibility of sticky price pressures," the Rabobank strategists said.