Bias
Neutral. The SNB keeps the policy rate at 0% (the central bank’s main interest rate) with inflation near target, keeping policy expectations in check. If the franc strengthens, the SNB could move back to negative rates (rates below zero) to curb gains; if Eurozone growth accelerates, CHF pressure may ease and the SNB could even hike before 2027, potentially lifting the CHF. For now, price action looks range-bound.
Key drivers
- SNB policy stance. With the policy rate at 0%, the central bank could pivot to negative rates if the franc continues to strengthen (negative rates meaning rates set below zero).
- Eurozone growth influence. Markets think stronger Eurozone growth could curb CHF appreciation pressure and may pave the way for a rate hike by the SNB before 2027, supporting a firmer CHF.
- Swiss trade backdrop. A sharp decline in the trade surplus and weaker exports—notably to the US—shaped CHF dynamics, creating headwinds for sustained CHF strength and increasing sensitivity to policy shifts.
- Price action versus the 3-month average. CHF pairs are trading near their 3-month averages, with CHFUSD at 1.2532 (near average; range 1.2335–1.2691), CHF EUR at 1.0767 (near average; range 1.0648–1.0846), CHF GBP at 0.9338 (about 0.7% below average; range 0.9298–0.9566), and CHF JPY at 198.2 (above average; range 189.5–198.7). This shows a largely range-bound environment despite underlying policy and growth contrasts.
Range
CHFUSD 1.2532; near its 3-month average; traded in 1.2335–1.2691 (about 2.9% range).
CHFEUR 1.0767; near its 3-month average; traded in 1.0648–1.0846 (about 1.9% range).
CHFGBP 0.9338; about 0.7% below its 3-month average of 0.9402; traded in 0.9298–0.9566 (about 2.9% range).
CHFJPY 198.2; about 1.7% above its 3-month average of 194.9; traded in 189.5–198.7 (about 4.9% range).
What could change it
- A shift in SNB policy (a move to negative rates if the franc strengthens, or a hike if inflation/risk conditions justify it).
- Surprises in Eurozone growth (stronger growth could ease CHF pressure and support a rate hike before 2027).
- Changes in Swiss trade data or policy responses to export challenges (improvement could lift CHF; deterioration could soften it).
- Market surprises or SNB intervention, or shifts in global risk sentiment (risk-off/risk-on flows) that would push the CHF in either direction.
