The EUR/CHF exchange rate has dropped to its lowest point since the Swiss National Bank (SNB) ended its currency peg in 2015. It’s now around 0.9188 and has decreased for five consecutive days due to a global stock selloff driven by high AI valuations. Switzerland may soon lower US tariffs on its exports from 39% to 15%, which could improve the local economy. The SNB removed its exchange-rate floor in 2015 to prevent major currency interventions, causing the Swiss Franc to appreciate by 20-30%.

Current Economic Indicators

The strength of the Swiss Franc may lead to SNB intervention if it affects the export-driven economy. Meanwhile, stable Eurozone data did not support the Euro; GDP grew 0.2% quarter-on-quarter and 1.4% year-on-year, matching expectations. The Swiss Franc is one of the world’s most traded currencies, benefiting from Switzerland’s stable economy and neutral political stance. The value of the Franc is influenced by the SNB’s monetary policy and environmental factors. Switzerland’s economy relies on the Eurozone, so the Franc often acts like the Euro. The CHF is viewed as a safe-haven currency, attracting investors during market downturns.

Market Observations and Strategy

With EUR/CHF falling below 0.9200, we are at levels not seen since the dramatic de-pegging in 2015. The main driver is a risk-off sentiment, as the Nasdaq Composite has dropped nearly 15% in the past month due to worries about slowing AI growth. Investors are flocking to the safe-haven Swiss Franc, a trend that seems likely to continue. However, the fast rise of the Franc puts the Swiss National Bank (SNB) back in the spotlight. We remember how the SNB took strong measures to weaken the Franc between 2020 and 2022. With the latest Swiss manufacturing PMI for October 2025 falling to 48.5, a stronger currency could hurt export prospects, increasing the likelihood of a sudden policy change or market intervention that could sharply reverse the current trend. For options traders, this situation makes buying options appealing, as it limits potential losses. Implied volatility for one-month EUR/CHF options has surged over 10%, the highest since the banking crisis in 2023, indicating market anxiety. Holding a short position through futures could lead to significant losses if the SNB acts unexpectedly. A good strategy for the next few weeks would be to buy EUR/CHF put options that expire in late December 2025 or January 2026. This approach allows us to benefit from further declines while capping our maximum loss to the premium we pay. It lets us take advantage of a bearish trend without exposing ourselves fully to the unpredictable SNB. Alternatively, if you expect intervention, buying out-of-the-money call options can be a low-cost way to prepare for a sharp recovery. Keep an eye out for comments from SNB officials; SNB Chairman Thomas Jordan’s last statement in September 2025 indicated the bank is “ready to be active in the FX market as necessary.” Any escalation in this wording could signal a rebound from these historic lows. Create your live VT Markets account and start trading now.

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