Swiss Franc softens on renewed US-Iran tensions, SNB intervention stance
Par Lallalit Srijandorn
Mis à jour: 28 May 2026
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The USD/CHF pair gains momentum to around 0.7895 during the early European trading hours on Thursday. Renewed tensions in the Middle East boost the US Dollar (USD) against the Swiss Franc (CHF).
- USD/CHF gathers strength near 0.7895 in Thursday’s early European session.
- Renewed tension and uncertainty around the US-Iran ceasefire underpins the US Dollar.
- SNB’s intervention stance might cap the upside for the Swiss Franc.
The USD/CHF pair gains momentum to around 0.7895 during the early European trading hours on Thursday. Renewed tensions in the Middle East boost the US Dollar (USD) against the Swiss Franc (CHF). The Swiss ZEW Survey and the US April Personal Consumption Expenditures (PCE) Price Index data will be published later on Thursday.
The United States (US) carried out new strikes on an Iranian military site allegedly posing a threat to US forces and maritime traffic in the Strait of Hormuz, according to the BBC. The US officials described the actions as measured, purely defensive, and intended to maintain the ceasefire.
US President Donald Trump on Wednesday vowed to reach a favorable deal to end the war with Iran, warning that the regime's efforts to bore him with waiting will not work because "I don't care about the midterm elections.”
Rabobank's Senior FX Strategist Jane Foley said that despite robust Swiss growth and solid Purchasing Managers' Index (PMI) readings, very low inflation leaves little need for imminent Swiss National Bank (SNB) tightening.
The Swiss central bank has signaled a heightened willingness to intervene against CHF strength, especially while geopolitical risks from the Iran war persist. This, in turn, might cap the upside for the CHF in the near term.
Swiss Franc FAQs
The Swiss Franc (CHF) is Switzerland’s official currency. It is among the top ten most traded currencies globally, reaching volumes that well exceed the size of the Swiss economy. Its value is determined by the broad market sentiment, the country’s economic health or action taken by the Swiss National Bank (SNB), among other factors. Between 2011 and 2015, the Swiss Franc was pegged to the Euro (EUR). The peg was abruptly removed, resulting in a more than 20% increase in the Franc’s value, causing a turmoil in markets. Even though the peg isn’t in force anymore, CHF fortunes tend to be highly correlated with the Euro ones due to the high dependency of the Swiss economy on the neighboring Eurozone.
The Swiss Franc (CHF) is considered a safe-haven asset, or a currency that investors tend to buy in times of market stress. This is due to the perceived status of Switzerland in the world: a stable economy, a strong export sector, big central bank reserves or a longstanding political stance towards neutrality in global conflicts make the country’s currency a good choice for investors fleeing from risks. Turbulent times are likely to strengthen CHF value against other currencies that are seen as more risky to invest in.
The Swiss National Bank (SNB) meets four times a year – once every quarter, less than other major central banks – to decide on monetary policy. The bank aims for an annual inflation rate of less than 2%. When inflation is above target or forecasted to be above target in the foreseeable future, the bank will attempt to tame price growth by raising its policy rate. Higher interest rates are generally positive for the Swiss Franc (CHF) as they lead to higher yields, making the country a more attractive place for investors. On the contrary, lower interest rates tend to weaken CHF.
Macroeconomic data releases in Switzerland are key to assessing the state of the economy and can impact the Swiss Franc’s (CHF) valuation. The Swiss economy is broadly stable, but any sudden change in economic growth, inflation, current account or the central bank’s currency reserves have the potential to trigger moves in CHF. Generally, high economic growth, low unemployment and high confidence are good for CHF. Conversely, if economic data points to weakening momentum, CHF is likely to depreciate.
As a small and open economy, Switzerland is heavily dependent on the health of the neighboring Eurozone economies. The broader European Union is Switzerland’s main economic partner and a key political ally, so macroeconomic and monetary policy stability in the Eurozone is essential for Switzerland and, thus, for the Swiss Franc (CHF). With such dependency, some models suggest that the correlation between the fortunes of the Euro (EUR) and the CHF is more than 90%, or close to perfect.
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