Safe-haven demand for the Swiss franc (CHF) has been limited by perceived risk of Swiss National Bank (SNB) action to curb currency strength. This has reduced the CHF’s usual support during periods of market stress.
The SNB has shifted towards more active intervention against franc appreciation since the outbreak of the US–Iran conflict. The approach has been described as reactive, aiming to cap CHF gains linked to safe-haven inflows rather than to push the currency lower.
EUR/CHF has moved below 0.92, which is being linked to lower expectations of SNB intervention as acute geopolitical risks ease. The move suggests markets may be adjusting how much SNB resistance they expect when the franc strengthens.
Despite this, it remains unclear whether the SNB will allow sustained CHF strength to help reduce imported inflation. The report indicates it is too early to assume the SNB will accept a stronger franc for that purpose.
The Swiss Franc’s role as a safe haven is currently being held in check by the market’s fear of the Swiss National Bank (SNB). We saw this during the Middle East diplomatic tensions in 2025, where the SNB likely intervened to cap the franc’s strength. This history makes traders cautious about betting on a strong and sustained rally in the currency.
With the EUR/CHF pair grinding below the 0.92 level, some are speculating that the SNB is becoming more tolerant as immediate geopolitical risks fade. However, Swiss inflation data from March 2026 came in at a manageable 1.4%, giving the central bank little incentive to desire a stronger currency to fight import prices. This suggests their primary goal remains stability, not active strengthening.
For derivative traders, this points towards selling call options on the Swiss Franc against the Euro or the Dollar. This strategy profits if the franc fails to appreciate significantly, which seems likely given the SNB’s perceived presence. The goal is to collect premium from the market’s expectation of capped upside.
Looking back, the SNB aggressively sold foreign currency during the high inflation period of 2022-2023 to deliberately strengthen the franc. The current situation is different, as the latest data on SNB foreign currency reserves shows they have been relatively stable through the first quarter of 2026. This signals a more reactive stance, focused on preventing excessive volatility rather than guiding the currency in a specific direction.
This creates a probable trading range for the franc, making volatility-selling strategies attractive. Traders could consider selling strangles on EUR/CHF, which involves selling both a call and a put option with different strike prices. This position is profitable as long as the currency pair does not make a large move in either direction in the coming weeks.
