The Swiss Franc (CHF) has recently experienced significant volatility, influenced heavily by external pressures, particularly the tariffs imposed by the U.S. on Swiss exports. Analysts have noted that the 39% tariff introduced by the Trump administration in July 2025 has adversely affected the Swiss economy, resulting in a decrease in the stock market and a corresponding slump in the franc. As the Swiss economy relies heavily on exports, these tariffs threaten its fundamental stability.
In response to the rising value of the franc in the wake of these tariffs, the Swiss National Bank (SNB) has taken decisive action, increasing its foreign currency purchases to 5.06 billion CHF in Q2 2025. This marks the largest intervention by the SNB in over three years. Analysts indicate that such interventions are aimed at stabilizing the currency and supporting price stability amidst deflationary pressures caused by an appreciating franc, which has made imports cheaper.
The interest rate outlook remains unchanged, with forecasts suggesting that the SNB will maintain its policy rate at 0.00% through at least 2026. A recent Reuters poll confirms this stance, highlighting the central bank's focus on maintaining steady inflation and a stable franc. However, the deflationary trend may continue as the strong currency puts downward pressure on domestic prices.
Current exchange rates reflect the impact of these developments. The CHF to USD is trading at 1.2420, reaching 14-day lows and sitting 0.6% below its 3-month average of 1.2502, while the USD/CHF pair has remained stable within a narrow range. The CHF to EUR rate is at 1.0776, slightly above its 3-month average, and shows limited volatility. In contrast, the CHF to GBP has strengthened to 0.9458, which is significantly above its 3-month average, and the CHF to JPY has reached 191.5, 2.7% above its average, indicating resilience against the yen.
As currency analysts and economists continue to monitor the situation, the ongoing consequences of U.S. tariffs and the SNB's currency management strategies will remain critical in determining the future trajectory of the Swiss Franc. Stakeholders in international transactions should stay informed to navigate the evolving market conditions effectively.
