The Swiss franc (CHF) has faced significant challenges recently, influenced by both domestic monetary policies and external economic pressures. The Swiss National Bank (SNB) made a notable policy adjustment in December 2024, cutting its key interest rate by 50 basis points to 0.5%. This reduction marked the fourth consecutive rate cut aimed at countering easing inflation and recent strength in the Swiss franc.
Inflation in Switzerland further complicates the outlook. In October 2025, inflation unexpectedly fell to 0.1% year-on-year, lower than the anticipated 0.3%. This decline was largely due to falling energy prices and softer costs in private services. Analysts believe this could lead to potential interventions by the SNB to manage the strength of the CHF if economic conditions don’t improve.
Looking ahead, UBS forecasts that the EUR/CHF exchange rate could rise to 0.94 by June 2026. This expectation is based on the European Central Bank's decision to maintain steady interest rates, which may strengthen the euro against the franc. Added to this is a recommendation from MUFG Bank suggesting that if the CHF continues its upward trajectory alongside declining global energy prices, the SNB might reintroduce negative interest rates or other measures to control its currency's strength.
The impact of external factors cannot be overlooked. A recent 39% tariff imposed by the Trump administration on Swiss exports has left officials and markets reeling, significantly affecting economic outlooks and contributing to a slump in both the stock market and the Swiss franc.
Current exchange rate data indicates that the CHF to USD has recently fallen to 30-day lows around 1.2485, slightly under its 3-month average, while trading in a stable 2.9% range from 1.2335 to 1.2691. The CHF to EUR has also reached 14-day lows at 1.0731, just below its average, with a similar stable range of 1.0648 to 1.0846. Meanwhile, the CHF to GBP stands at 0.9313, which is about 1.0% below its 3-month average. The CHF to JPY, however, is seeing more favorable conditions, trading at 197.1, approximately 1.6% above its average, and within a 5.0% range of 189.1 to 198.6.
These developments suggest that the Swiss franc will continue to react to both internal economic policies and external trade pressures, making it essential for small businesses, expats, and travelers to stay informed about exchange rate movements and potential future policies by the SNB.
