It’s been an eventful week for Switzerland, with several developments impacting the Swiss Franc (CHF) and monetary policy sentiment, according to ING’s FX strategist Chris Turner.
SNB Adjusts Reserve Policy – Not Stealth Easing, But a Potential Risk for the Franc
On Monday, the Swiss National Bank (SNB) announced changes that will increase the volume of banking sector deposits subject to its -0.25% interest rate. While the SNB framed this move as a technical adjustment following last year’s revision to minimum reserve requirements, it introduces a new variable for CHF money market rates when the change takes effect on November 1.
Though not an outright easing of policy, ING sees this as a mild downside risk for the franc, depending on how markets react to its implementation.
FX Intervention Backed by the US?
Later on Monday, a rare joint statement was issued by Swiss and US authorities regarding foreign exchange intervention. The SNB presented it as confirmation that FX intervention is a legitimate part of its monetary policy toolkit. The US version, however, was more limited, stating that such actions should only address “disorderly” market conditions.
This contrast may explain why EUR/CHF didn’t react strongly, despite the implication that Switzerland has received implicit backing from the US to continue currency market operations.
Pharma Ties and US Politics: A Hidden Link?
ING speculates that the timing of this FX statement could be linked to pharmaceutical negotiations between Swiss drugmakers and the US government. With Donald Trump launching his ‘TrumpRx’ initiative to provide cheaper medications to US consumers, Swiss firms may be expected to cooperate. Pfizer was the first major company to sign on this week.
If this interpretation is correct, Switzerland may be receiving diplomatic space to continue FX interventions—potentially shielding the SNB from accusations of currency manipulation.
EUR/CHF Outlook: Rangebound Into Year-End
Despite these developments, ING expects SNB intervention to remain passive rather than aggressive. The central bank appears committed to stabilising the franc rather than actively devaluing it.
Forecast:
ING maintains its view that EUR/CHF will continue to trade within the 0.92–0.93 range heading into the end of the year.
If you’d like this adapted for a newsletter, investor report, or social media s