Commerzbank says the SNB has limited lasting ways to weaken the Swiss franc against major currencies such as the US dollar. It adds that verbal guidance and quicker reactions do not change the longer-run direction of the currency.
The note says large FX intervention would be needed to alter the franc’s long-term path, at a scale similar to before 2024. It contrasts interventions of a few billion CHF with an estimated 50 billion CHF that could be required.
Limits Of Snb Tools
It says the SNB avoids such large sums because bigger foreign exchange reserves increase foreign-currency risk. It also says the SNB may not want to raise its balance-sheet exposure to USD in the current setting.
It adds that the US trade deal is fragile and that heavy interventions could provoke a negative response from the US president. It also notes that a sharper trade conflict could affect the real economy, which may discourage the SNB from acting.
The Swiss National Bank (SNB) has very few tools left to weaken the Swiss franc in any meaningful way. This creates an underlying bias for a stronger franc, meaning any near-term USD/CHF relief rallies are likely to be temporary. We see this as a structural, not cyclical, issue for the currency pair.
We note that Swiss inflation in the first quarter of 2026 has held steady around 1.5%, well below the persistent 3% figure in the United States. This fundamental economic divergence continues to attract capital to the franc as a store of value. The SNB’s foreign currency reserves, while down from their peak, still sit at a hefty CHF 850 billion, making the bank very reluctant to expand its balance sheet further.
Implications For Usd Chf
To truly alter the franc’s long-term path, the SNB would need to intervene on a scale seen before 2024, likely in the tens of billions. The minor interventions we have seen over the past year are insufficient to counter the fundamental pressures. Therefore, we should view them as creating noise rather than a new direction for the franc.
Furthermore, there are significant political constraints at play, particularly with the sensitive US trade relationship. We believe large-scale interventions to weaken the franc would almost certainly be labeled as currency manipulation, jeopardizing the trade deal. This risk to the real economy is a powerful deterrent that the SNB cannot ignore.
For derivatives traders, this suggests that selling into short-term franc weakness could be a viable strategy in the coming weeks. Any dips in the franc’s value, perhaps caused by SNB verbal interventions, should be seen as potential entry points for longer-term bullish positions. Buying longer-dated call options on the CHF against the USD allows one to capitalize on the expected structural appreciation while capping downside risk.
