Key Moments
- EUR/CHF touches a new post-2015 low at 0.91237/EUR as the Swiss Franc remains firmly bid.
- Societe Generale analysts attribute Swiss Franc strength mainly to Alphabet’s multi-part CHF bond issuance and sell-side calls targeting 0.87/EUR.
- The SNB maintains that inflation is on target over the next two years, keeping the threshold high for any return to negative rates.
Swiss Franc Strength Versus EUR Amid Risk-On Mood
Societe Generale analysts report notable Swiss Franc resilience as EUR/CHF marks a fresh post-2015 low, with the currency remaining in demand even against a generally risk-positive market backdrop. They highlight that EUR/CHF has dropped to new multi-year territory, reflecting pronounced Swiss Franc outperformance.
Drivers Behind the Move in EUR/CHF
The analysts point to specific market flows as the primary catalyst behind the latest leg of Swiss Franc strength. They cite Alphabet’s issuance of a five-part bond in Swiss Francs as a key factor supporting the currency. In addition, they note that existing sell recommendations, including one targeting a move to 0.87/EUR, may have contributed to amplifying the downside in EUR/CHF.
| Key EUR/CHF and SNB References | Detail |
|---|---|
| New post-2015 low | “The Swissie stays bid in early trading at the open, plumbing a new post-2015 low of 0.91237/EUR.” |
| Sell-side target cited | “Sell recommendations with one house targeting 0.87/EUR may have amplified the price action.” |
| Prior EUR/CHF level at December meeting | “The SNB was confident at the December meeting (EUR/CHF 0.9328) that inflation is on target over the next two years.” |
SNB Policy Outlook and Inflation Assessment
On the policy front, Societe Generale highlights the recent communication from the Swiss National Bank. They reference comments from the SNB president on the conditions under which the central bank might reintroduce negative interest rates. While emphasizing that the SNB is prepared to act if needed, the analysts underscore that the hurdle for such a move remains significant as long as the inflation outlook is assessed to be in line with the target for the coming two years.
They also recall that at the December meeting, when EUR/CHF was at 0.9328, the SNB expressed confidence that inflation would stay on target over the two-year horizon. This stance suggests no immediate urgency to alter the current policy path in response to the recent currency strength.
Selected Analyst and Policymaker Comments
“The Swissie stays bid in early trading at the open, plumbing a new post-2015 low of 0.91237/EUR.”
“SNB president Schlegel just last week reiterated that the bank is ready to return to negative rates if needed but that bar remains high as long as inflation is deemed to be on target over the next two years.”
“The more plausible explanation for the currency outperformance on a ‘risk on’ day is the five-part bond issue in CHF by Alphabet.”
“Sell recommendations with one house targeting 0.87/EUR may have amplified the price action.”
“The SNB was confident at the December meeting (EUR/CHF 0.9328) that inflation is on target over the next two years.”
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