Outlook
Swiss franc remains bid on a persistent safe-haven bid as global uncertainties and geopolitical tensions weigh on sentiment. The CHF has traded near its strongest levels in over a decade against both the euro and the dollar, supported by demand for stability. Markets price in potential SNB action if the currency stays firm, including rate cuts or interventions to protect export competitiveness, though such moves would need to balance price stability. MUFG notes the risk of negative rates if the CHF stays strong. The 2025 tariff shock on Swiss exports also underscored the currency’s sensitivity to the external trade backdrop. If risk appetite improves, the CHF could ease; if tensions persist, the CHF could stay firm or strengthen further.
Key drivers
• Exceptional safe-haven demand has pushed the CHF to multi-year highs versus the euro and the dollar, with investors seeking currency stability amid global uncertainty (sources note this strong demand).
• Potential SNB policy response could include easing measures or FX interventions to prevent excessive damage to Switzerland’s exporters, even as the currency remains strong (MUFG notes risk of negative rates if the CHF stays strong).
• A stronger trade surplus supports the CHF, yet a very strong currency weighs on export competitiveness and may complicate the economic recovery for exporters.
• Ongoing global economic uncertainties keep demand for safe-haven assets elevated, supporting the CHF against major currencies.
• A historic tariff shock in July 2025 highlighted the sensitivity of Switzerland’s export-led economy to external policy changes and the currency’s impact on trade.
Range
• CHF/USD at 1.2983 is 2.6% above its 3-month average of 1.2652, having traded in a range from 1.2350 to 1.3115.
• CHF/EUR at 1.0954 is 1.5% above its 3-month average of 1.0788, having traded in a range from 1.0648 to 1.0971.
• CHF/GBP at 0.9570 is 1.8% above its 3-month average of 0.9405, having traded in a range from 0.9298 to 0.9575.
• CHF/JPY at 198.8 is 0.7% above its 3-month average of 197.4, having traded in a range from 193.0 to 203.4.
What could change it
• A shift in global risk appetite away from safe-haven demand could see the CHF ease and take back some of its strength.
• Detected or anticipated SNB policy actions (further rate cuts or FX interventions) could cap further appreciation or push the CHF lower.
• Changes in Switzerland’s export environment or new trade policy developments could alter the currency’s sensitivity to the external backdrop.
• Domestic economic data surprises (inflation, growth, or inflation expectations) or shifts in central bank communications from other major economies could influence risk sentiment and CHF moves.
