Swiss Franc to Remain Under Pressure Until 2026: Commerzbank Analyst

Commerzbank FX analyst Michael Pfister believes the Swiss Franc (CHF) will remain under pressure until 2026 due to subdued Swiss inflation and the market gradually pricing out expectations of a rate hike by the Swiss National Bank (SNB).

Pfister notes that current inflation trends suggest that rates are unlikely to rise as soon as mid-2027, contrary to market expectations. He adds that even if reports emerge about the SNB keeping interest rates unchanged until 2027, the market will still need to adjust its expectations.

The rate differential between the European Central Bank (ECB) and the SNB is also a concern for Pfister. If the ECB raises its key rate in September, as expected, it will widen further, exerting downward pressure on the Franc.

Pfister expects the Swiss Franc to continue facing difficulties until the end of 2026 but believes it will recover next year. He notes that once expectations of rate hikes are priced out, the SNB's limited options for weakening the Franc will become apparent.