CHF: Safe-haven puzzle and SNB signals – Commerzbank

Commerzbank’s Michael Pfister notes that despite the war-related volatility in G10 FX, the Swiss Franc (CHF) has been one of the weakest G10 currencies, even though it remains a key safe haven. He highlights limited actual safe-haven demand, verbal intervention by the Swiss National Bank (SNB) and possible FX purchases. Pfister also flags confusing EUR/CHF reactions to geopolitical headlines and expects only modest SNB intervention data for Q1 2026.

Franc underperforms despite safe-haven status

"Following an initial rush to safe havens in early March, however, it has become clear that the Swiss franc has consistently been one of the worst performers among the G10 currencies. This seems counterintuitive at first glance given that we have repeatedly emphasised that the franc is the last remaining safe-haven currency."

"On the other hand, however, the Swiss National Bank has intervened verbally on multiple occasions. This was mostly during periods when the franc had appreciated, effectively setting an upper limit on its strength."

"But it is also possible that the SNB followed through on its threats and actively purchased foreign currencies to artificially weaken the franc. It likely took a similar approach last year following Liberation Day."

"Data on foreign exchange market operations is always published with a delay of one quarter, meaning that the data for the first quarter will not be available until the end of June. But market participants expecting a high figure should lower their expectations."

"After the two-week ceasefire between Iran and the US was announced last week, the CHF showed a confusing performance in response. Rather than showing higher risk appetite and thus lower demand for safe havens, as other markets did, EUR/CHF trended lower - that is, towards a stronger franc."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)