UBS Sees EURCHF Opportunity Above 0.94 through Year-End

UBS economists are maintaining their forecast for the EURCHF exchange rate at around 0.94 through the end of 2026, citing near-term upside risks before an expected gradual decline in 2027.

The Swiss National Bank's (SNB) decision to keep its policy rate unchanged at its September meeting has removed any potential hawkish pressure on the franc. According to UBS economists Constantin Bolz and Clémence Dumoncel, domestic inflationary pressures remain limited, despite a slight increase in Swiss inflation from 0.4% to 0.8% year-over-year in August.

The SNB now expects two rate hikes in March and June 2027, bringing forward the first increase from a previous expectation of mid-2027. Wide yield differentials continue to weigh on the franc, supporting its use as a funding currency. The Swiss franc has weakened by around 5% on a broad basis since the onset of the Middle East conflict.