Swiss Franc Surges to Two-Month High Amid US Treasury Moves
The Swiss Franc (CHF) has surged to a two-month high of around $0.798, driven by shifting foreign exchange dynamics. The US Treasury's plan to increase bond buyback operations is weighing on demand for the US dollar and supporting the franc.
Meanwhile, traders are moving short positions in the yen into other relatively weaker safe-haven currencies, potentially creating an offsetting pressure on the Swiss Franc. This shift could provide a boost to the CHF as it becomes a more attractive funding currency for carry trades.
The SNB kept its policy rate at 0% and is expected to remain unchanged throughout 2027, while reiterating its preference for foreign exchange intervention to prevent excessive franc appreciation. Economists predict that the first rate hike will occur in early 2028, but markets are pricing in a potential increase as soon as March 2027.