The Swiss franc appears set to retain its role as a perceived safe-haven currency this year. In early February, the EURCHF briefly fell below the 0.91 mark—a level last reached when the lower limit was abolished. The franc is also trading stronger against the US dollar, after appreciating by over 12 percent in 2025. This renewed appreciation reflects an environment characterized by geopolitical uncertainty, subdued growth, and heightened market sensitivity to risks. In such an environment, investors seek as much stability as possible, for example, in the franc.
According to our foreign exchange survey, business leaders see political and geopolitical events as the main reason for the ongoing strength of the franc. Economic uncertainties and the monetary policies of major central banks also play a role. While Switzerland stands out as comparatively robust with low inflation and solid public finances, growth prospects in the eurozone remain fragile, and the dollar is weighed down by political uncertainties and rising debt. As this situation is unlikely to change in the near term, we do not expect the structural appreciation pressure on the franc to disappear.
This view is shared by Swiss companies according to our survey (available in German and French): By the end of 2026, the 300 Swiss firms surveyed expect, on average, a EURCHF exchange rate of 0.91 and a USDCHF rate of 0.78, i.e., exchange rates that are expected to move sideways. For many companies, however, the strength of the franc does not appear to be an existential problem. They report that the appreciation against the US dollar has had no effect or even a positive effect—for example, because they are heavily import-oriented or the US is not a key sales market. The situation is different for exporters whose revenues are highly dependent on the dollar: For about half of them, the combination of franc appreciation and higher US tariffs has had a clearly negative impact. For 11 percent, exports to the US are no longer profitable at current exchange rates. If the USDCHF rate were to fall to 0.70-0.75, almost half of these companies would consider their US exports unprofitable.
The economic outlook also remains subdued. Although sentiment has improved slightly following the customs agreement reached between Switzerland and the US in November, more companies overall expect lower rather than higher growth in 2026. This assessment aligns with our forecast of 0.9 percent growth for the current year. Only with a possible recovery of the German economy in the second half of 2026 is Switzerland likely to return closer to its trend growth. This expected recovery in Germany—and thus in the European economy as a whole—is also the main reason our currency specialists expect the EURCHF to appreciate to 0.95 by summer. According to our estimates, the franc is overvalued against the euro. If this does not occur, the franc is unlikely to lose its role as a perceived safe-haven currency against the euro this year.
Despite the strength of the franc, low inflation, and subdued growth, the Swiss National Bank (SNB) currently sees little reason for intervention. The policy rate is likely to remain at zero percent over the next twelve months. Continued appreciation of the franc would likely dampen inflation further and increase the risk of negative monthly readings, but overall inflation should remain above zero in 2026. Foreign exchange interventions are possible in this environment, but we believe they will remain selective. In our view, the conditions for a sustained weakening of the franc are not in place; our foreign exchange survey confirms this.
Our conclusion? The environment is certainly challenging for the domestic export sector; however, systematic currency interventions also come with costs—political, economic, and social. In an environment where easy decisions are increasingly rare, the SNB has chosen to avoid monetary activism. Accordingly, structural strength in the franc is likely to remain a reality, even if phases of consolidation are possible. For investors, it may well be worthwhile in this environment to hedge part of their foreign currency portfolio, especially against the dollar, despite the historically high relative costs.
