The Swiss National Bank (SNB) Vice Chairman, Antoine Martin, recently pointed out that the global economy grew more than expected in the third quarter. He mentioned that many countries are experiencing strong economic activity and increased investments, especially in artificial intelligence (AI). While uncertainty has decreased since the last SNB meeting, risks like US tariffs still remain.

Swiss Franc Unaffected

Martin’s comments are unlikely to impact the Swiss Franc, as they focused on global trends rather than Switzerland’s specific situation. Currently, the USD/CHF exchange rate is down by 0.1%, sitting around 0.7995. Switzerland has the ninth-largest economy in Europe by nominal GDP and ranks high globally for living standards, competitiveness, and innovation. The Swiss economy largely depends on its services sector, especially from exports to the European Union. Switzerland is famous for its watch exports and has strong industries in food and pharmaceuticals. Even though Switzerland’s growth rate is slowing, its economic stability usually helps the Swiss Franc. Commodity prices like Gold and Oil don’t typically affect the Franc much, due to Switzerland being a net fuel importer and its long history with Gold. Given the unexpectedly strong global economy in Q3 2025, it may be wise to prepare for steady growth. Recent data shows that the Eurozone manufacturing PMI for November 2025 increased to 50.5, returning to growth territory. Therefore, buying call options on broader market indices like the STOXX 600 or S&P 500 for the next few months could be a smart move. High investments in AI indicate a specific sector that is doing well. Capital expenditure reports from major tech companies in Q3 2025 reveal a 15% year-over-year increase in data center investments. Thus, maintaining long positions in Nasdaq 100 futures or call options on tech-focused ETFs could be beneficial to tap into this growth driver. Reportedly, uncertainty has decreased, which is reflected in the VIX index. It has been falling and recently went below 15 for the first time since mid-2025. This environment may create opportunities for selling volatility. Strategies like selling cash-secured puts on stable, large-cap companies or utilizing credit spreads may be worth considering.

Swiss Franc As A Funding Currency

With the Swiss National Bank keeping its interest rate at 0%, the Swiss Franc is a cheap currency to borrow. In comparison, the US Federal Reserve’s key rate is around 3.5%, creating a clear interest rate gap. This makes the Franc attractive for funding trades, such as going long on USD/CHF futures. However, we need to be cautious of significant risks, especially from US tariffs. The upcoming US trade policy review in January 2026 poses a risk that could quickly change the current positive outlook. A portion of profits from bullish trades should be set aside to purchase protective put options on export-heavy indices as a cost-effective way to hedge. Create your live VT Markets account and start trading now.

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