Outlook
The Swiss franc is likely to stay bid in the near term on safe-haven demand and persistent uncertainty. The SNB could consider negative interest rates again if the CHF remains stubbornly strong, aiming to curb currency strength and support inflation and growth. Record highs versus the euro highlight divergent monetary paths, while export exposure remains a risk as a firmer CHF makes Swiss goods pricier abroad.
Key drivers
- Safe-haven demand persists amid geopolitical tensions and global uncertainty, supporting the CHF across major pairs.
- Policy risk for SNB: potential reintroduction of negative rates if the CHF stays strong, influencing hedging costs and market expectations.
- CHF strength versus the euro reflects inflation differentials and broader policy divergence, impacting cross-border trade and pricing.
- Export sensitivity: a stronger CHF weighs on Swiss exporters and the trade balance, potentially offsetting safe-haven inflows.
- Trade shocks can amplify moves: the July 2025 tariff of 39% on Swiss exports underscored how external shocks can trigger CHF volatility and market re-pricing.
Range
CHFUSD 1.2892 (2.4% above 3-month average of 1.2595; 3-month range 1.2350–1.3115)
CHF EUR 1.0909 (1.3% above 3-month average of 1.077; range 1.0648–1.0920)
CHF GBP 0.9469 (0.7% above 3-month average of 0.9401; range 0.9298–0.9566)
CHF JPY 202.7 (3.1% above 3-month average of 196.7; range 190.6–202.7)
What could change it
- SNB policy signals: clearer communication or actions toward negative rates if the CHF remains elevated.
- Global risk sentiment: improvement could ease demand for the CHF; deterioration could sustain or extend strength.
- Currency dynamics: shifts in USD strength or weakness can influence CHF pairs, given the carry and safety trade.
- Trade developments: any changes to tariffs or export prospects could alter the CHF’s appeal relative to other currencies.
- Domestic data: surprises in Swiss inflation or growth may alter expectations for policy and CHF trajectory.
