Commerzbank’s Michael Pfister forecasts EUR/CHF will rise in the next few months if the euro recovers and markets delay expected Swiss National Bank (SNB) rate rises. He says the SNB has used repeated verbal messages to slow the franc’s recent rise.
Market pricing for SNB tightening has shifted since the outbreak of the Iran war, with about one rate rise priced in by year end. Pfister considers a rate rise this year unlikely.
Near Term Eur Chf Upside
He expects the European Central Bank to raise rates in June while the SNB keeps rates unchanged. This would widen the interest rate gap with the euro and, in this scenario, reduce the franc’s appeal.
He describes an SNB approach of verbal statements, only small actual interventions, and steady rates. He says this could lift EUR/CHF by a further two centimes once the euro’s recent weakness is fully reflected in prices.
Later, he expects the franc to strengthen again as Switzerland’s lower inflation and healthier public finances come back into focus. On that basis, EUR/CHF is projected to drift lower again into 2027.
The Swiss National Bank’s strategy appears to be a mix of talking down the franc while keeping interest rates unchanged, a pattern we also observed in early 2025. With Switzerland’s latest inflation figure for April coming in at a low 1.4%, there is little pressure for a rate hike. This contrasts with the Eurozone, where inflation remains stickier around 2.5%, keeping the European Central Bank on hold and widening the interest rate differential in the Euro’s favor.
Trade Expression And Timing
This divergence suggests a window for a potential rise in EUR/CHF over the next several months. Traders could consider buying EUR/CHF call options with strike prices near the 1.0000 parity level, targeting expirations in late summer such as August or September 2026. This approach positions for the expected move higher while clearly defining the maximum risk involved.
We remember how market expectations for SNB rate hikes rose sharply during the flare-up of the Iran conflict in 2025, but those hikes never actually happened. The market is again pricing in a small probability of a rate increase by the end of this year, which we view as unlikely. The SNB seems to be following the same playbook of using words, not policy changes, to manage the currency.
However, this is likely a temporary opportunity, as the franc’s underlying strength is expected to re-emerge later in the year. Switzerland’s solid public finances, with a public debt-to-GDP ratio historically well below 40%, and a track record of lower inflation will eventually attract capital back to the franc. Any long positions should therefore be managed with a view to exit before the final quarter of 2026, when this long-term trend could resume.
