This month, USD/CHF declined below its established two-year trading range of 0.84 to 0.92. On April 21, USD/CHF touched a ten-year low of 0.8040 before rebounding to 0.83 over the last couple of trading sessions. Before speculating on whether USD/CHF has reached its lowest point, it would be beneficial to examine prior instances when USD/CHF reached even lower levels in 2011 and 2015. This review will enhance our understanding of the CHF’s resilience and the Swiss National Bank’s responses in each situation, according to DBS’ FX analyst Philip Wee.
Policy risks cast a shadow over USD/CHF’s potential recovery
“In the initial instance, USD/CHF found a bottom at 0.7071 in August 2011. The SNB’s focus was on EUR/CHF, which was approaching 1.00 in August 2011, driven by investors seeking refuge during the Eurozone sovereign debt crisis. In September 2011, the SNB announced it would “no longer accept” a EUR/CHF rate below 1.210 and committed to purchasing unlimited amounts of foreign currency to maintain this floor.”
“In December 2024, the SNB lowered interest rates by 50 basis points to 0.50% amidst USD strength. This action propelled USD/CHF to nearly 0.92 in January 2024 from its 0.84 low in September 2024. Regrettably, the environment has become less favorable for offsetting the CHF’s strength in 2025. The SNB’s 25 bps rate reduction to 0.25% on March 20 provided temporary support for USD/CHF around 0.88, but it was overshadowed by the unpredictable tariff policies of the Trump administration.”
