The Swiss franc experienced a significant appreciation against the dollar, marking its largest single-day gain since 2015, driven by safe-haven demand. USD/CNH is exhibiting a tentative recovery above 0.820 following an overnight decline that briefly tested 0.814, according to ING FX analyst Francesco Pesole. USD/CHF faces potential further depreciation towards 0.800.
Market sentiment suggests a reduced expectation of intervention by the Swiss National Bank (SNB) to curb CHF strength. This perception is predicated on the understanding that persistent, unilateral FX intervention could trigger scrutiny from the US Treasury, potentially leading to Switzerland being designated as a currency manipulator and facing retaliatory tariffs.
Upcoming sight deposit figures for March, to be released by the SNB on Monday, will be closely monitored. An increase in sight deposits is typically interpreted as an indication of SNB intervention to weaken the franc. However, these figures may not accurately reflect the SNB’s current or future actions in April, given that CHF gains against the USD were more moderate in March, and EUR/CHF strengthened due to German fiscal stimulus measures.
