Outlook
The Swiss franc remains in a cautious‑to‑softening stance against the dollar and the euro, as the SNB keeps policy at 0% with inflation projections of 0.2% (2025) and 0.3% (2026). Policy options remain on the table if the franc strengthens, including the potential reintroduction of negative rates. Conversely, stronger-than-expected Eurozone growth could ease franc upside pressure and possibly open the door to a policy rate rise before 2027, per UBS. External shocks to Swiss exports—such as the 2025 trade‑surplus decline and the July 2025 tariff on Swiss goods—continue to inject volatility into sentiment around the franc.
In the near term, the CHF is being driven by cross‑rate moves and policy signals. Markets will watch how risk appetite and global trade developments unfold, as these will shape whether the franc remains a safe‑haven bid or moves with broader currency cycles.
Key drivers
- SNB policy: 0% rate with very low inflation forecasts; a strong franc could push the SNB to consider negative rates again to curb appreciation.
- External shocks: a 2025 trade surplus decline and the July 2025 39% Swiss export tariff have historically unsettled Swiss assets and the currency.
- Eurozone growth: UBS suggests that stronger Eurozone growth could reduce CHF upside pressure and may pave the way for a rate increase before 2027.
- Market momentum: cross‑asset moves and risk sentiment continue to influence the franc as a proxy for global risk and global growth prospects.
Range
CHFUSD: 1.2335-1.2905; current 1.2840; 3-month average 1.2531.
CHF EUR: 1.0648-1.0869; current 1.0835; 3-month average 1.075.
CHF GBP: 0.9298-0.9566; current 0.9404.
CHF JPY: 189.5-200.6; current 199.2; 3-month average 195.4.
What could change it
- If the franc strengthens further, the SNB could reintroduce negative rates to curb the currency’s rise.
- A sustained improvement in Eurozone growth could lessen CHF upside pressure and raise the possibility of a policy rate move before 2027.
- A shift in global risk sentiment or renewed protectionist measures could push the franc higher or lower, depending on the direction of flow and safe-haven demand.
- Clearer guidance from the SNB or unexpected policy actions could shift the cross‑rates more abruptly than the current data imply.
