The Swiss National Bank said on Monday, during European trading hours, that it could intervene in foreign exchange markets to dampen rapid and excessive appreciation of the Swiss Franc. After the comments, USD/CHF was 0.5% higher, near 0.7730.
The Swiss National Bank is Switzerland’s central bank and has a mandate to ensure price stability over the medium and long term. It defines price stability as Swiss CPI rising by less than 2% per year.
The SNB sets its policy rate to meet its price objective. Higher rates are generally associated with a stronger Swiss Franc, while lower rates tend to weaken it.
The SNB has regularly intervened in foreign exchange markets to limit Swiss Franc strength, which can affect export competitiveness. Between 2011 and 2015, it used a peg to the euro to restrain CHF gains.
It can intervene using foreign exchange reserves, often by buying currencies such as the US dollar or the euro. During periods of higher inflation, especially linked to energy, it may refrain from intervening because a stronger CHF can reduce energy import costs.
The SNB meets once per quarter in March, June, September and December for its monetary policy assessment. Each meeting includes a policy decision and a medium-term inflation forecast.
The Swiss National Bank (SNB) has clearly stated it is prepared to intervene in currency markets to weaken the Swiss Franc. This is a direct warning that further appreciation of the franc will likely be met with action from the central bank. We should view this as a signal that a potential floor is being established for pairs like USD/CHF and EUR/CHF.
This verbal intervention is given weight by the latest economic data, as Swiss inflation for February 2026 registered at 1.4%, comfortably below the SNB’s 2% target. With price stability achieved, the bank can now prioritize supporting Switzerland’s export sector, which is harmed by an overly strong currency. This makes their threat to buy foreign currency highly credible.
We see this as a significant policy reversal from the stance taken through much of 2023 and 2024, when the SNB sold foreign reserves to strengthen the franc and fight inflation. From the perspective of 2025, we saw the franc gain ground as a safe-haven asset amid global uncertainty. The SNB’s new language suggests it will not tolerate a repeat of that significant appreciation this year.
For derivative traders, the increased likelihood of intervention raises implied volatility, making options strategies attractive. Buying call options on EUR/CHF, particularly with the pair trading near the psychologically important 0.9450 level, offers a way to profit from a weaker franc. This strategy has a defined risk, limited to the premium paid for the options.
Looking back, we remember the extreme market volatility in January 2015 when the SNB unexpectedly removed its euro peg. While we do not expect a shock of that magnitude, it serves as a reminder of how decisively the SNB can act. The bank’s current statements suggest a more managed, but firm, approach to guiding the currency lower.
With the next official SNB policy meeting scheduled for later this month, this warning seems timed to manage expectations. Any short-term strength in the Swiss Franc over the coming weeks could represent a selling opportunity. It is generally unwise to position against a central bank that has clearly stated its intentions and has the reserves to back it up.
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