Swiss Franc Faces Prolonged Weakness before Potential Recovery
Commerzbank's FX analyst Michael Pfister believes that the Swiss Franc (CHF) will remain under pressure through 2026 due to subdued inflation and limited intervention capacity of the Swiss National Bank (SNB).
The SNB is unlikely to raise interest rates, with expectations of a hike by mid-2027 already priced out. This would mean the CHF continues to face difficulties until the end of the year.
However, Pfister notes that once remaining rate hike expectations are priced out, the SNB's limited options for weakening the franc will become apparent. The bank is not willing to intervene aggressively and its ability to cut interest rates is limited.
In the medium term, the analyst expects EUR/CHF to stabilize at 0.94 by the end of the third quarter in 2027.