CHF Weakness Persists Amid Carry Trade Demand and JPY Intervention

The Swiss Franc (CHF) remains under pressure due to growing demand for carry trade funding and recent Japanese Yen intervention, which has reinforced its role as a preferred funding currency. According to OCBC's Sim Moh Siong and Christopher Wong, the CHF is likely to remain weak at least until year-end 2027.

The SNB appears comfortable with a weaker currency, and with inflation subdued and policy rates likely anchored at zero, the case for continued CHF softness is reinforced. The downtrend has received fresh support from a press report suggesting that the SNB expects to keep policy rates at zero until end-2027.

The carry trade funding pressures continue to weigh on the CHF, while recent JPY intervention may have further cemented its role as the market's preferred funding currency. As a result, the CHF is the worst-performing G10 currency against the USD so far in 3Q26.