SNB continues to intervene only cautiously – Commerzbank

Yesterday's figures on the Swiss National Bank's (SNB) foreign exchange interventions, which amounted to around 100 million in the fourth quarter, once again confirmed that the SNB is currently intervening in the foreign exchange market rather cautiously, Commerzbank's FX analyst Michael Pfister notes.

SNB is likely to be comfortable with the franc at the moment

"In total, the SNB bought around 1.2 billion CHF in foreign currencies last year to weaken the franc - not a particularly large sum compared with the 22.6 billion CHF in foreign currency sales in the fourth quarter 2023 alone, when the SNB was still trying to strengthen the franc."

"But the new figures will have come as little surprise to market participants. While the SNB has emphasised its willingness to intervene more forcefully in the foreign exchange market if necessary, it has also repeatedly warned of the risks of an excessively large balance sheet."

"And with Donald Trump in the White House and the risk of being hit with tariffs for intervening to weaken the franc, the SNB is likely to remain cautious in the coming months. However, with EUR/CHF now trading higher than at the end of February due to a stronger euro, the SNB is likely to be more comfortable with the franc at the moment than it was last year."